DonorSearchDonorSearch

By donorsearch

Nonprofit Annual Reports: 7 Best Practices [Templates]

Every year nonprofits present their accomplishments and projects to their supporters and the general public in an annual report. An annual report details an organization’s mission, growth over the course of the year, projects that helped serve the community, statistics related to the organization’s cause, and much more. Ultimately, your organization’s annual report can be used to cultivate new partnerships with major donors and sponsors as well as recognize those who have helped you reach your goals thus far.  A successful, captivating annual report can make the difference between reaching your goals for the upcoming year or falling short. With so much at stake, it’s no wonder that organizations take the creation of their annual report so seriously. From in-depth brochures to interactive web pages, the annual report has changed drastically over the years. While the design and content of your report will vary depending on the type of organization, there are essential annual report best practices that every nonprofit can use:
  1. Create a plan for your nonprofit annual report.
  2. Include all the nonprofit annual report requirements.
  3. Focus your annual report on your donors’ accomplishments.
  4. Use visuals in your annual report to keep readers engaged.
  5. Be honest about your nonprofit’s progress.
  6. Highlight major contributors in your nonprofit annual report.
  7. Inspire supporters to take action.
With these tips and our annual report templates, you’ll be prepared to create a report that recognizes your donors and inspires others to help you succeed. In addition to our best practices, we’ll delve deeper into the benefits of annual reports. Our bonus section will explain how the information in annual reports can help feed charitable giving databases (like DonorSearch’s), which can boost your prospect research.   Let’s get started!  

1. Create a plan for your nonprofit annual report.

When your organization starts a new fundraising campaign, creating a strategy is the first step — and the same goes for your annual report. You’ll need the help of multiple departments to assemble all the information as well as compile and design the document.  First, every successful nonprofit annual report has a clear purpose and audience that your organization needs to determine.  It’s likely that your audience will be your supporters as well as prospective major donors, corporate sponsors, and foundations. At its core, your annual report should persuade your audience to support your cause, but you might have smaller objectives (i.e., highlighting a new project or attracting more local sponsors) specific to your nonprofit’s goals. Now that you’ve established your audience and goals, you can schedule your plan of action. Your annual report strategy might include:
  • Delegating responsibilities and timelines to team members.
  • Interviewing supporters for their feedback.
  • Compiling financial statements.
  • Collecting key metrics from fundraising campaigns.
Depending on your organization’s fundraising campaigns and programs, you might not be able to cover everything you’ve accomplished. That’s why you should try to boil down all your activities to a few major achievements. By centralizing your accomplishments around 3-5 core themes, you will help keep your annual report focused, leading supporters to your core objective.  When your nonprofit has a clear plan, not only will the process of creating your report run smoothly but the end result will also have more direction and purpose.  

2. Include all the nonprofit annual report requirements.

If you look at a nonprofit annual report, you’ll see that most include similar elements no matter what type of cause they support. While it’s fine to get creative with your additional sections so that your report stands out, you also need to make sure that all the essential information is present. Moreover, your accomplishments might change from year to year but the underlying points should stay the same. Including these elements will keep your annual reports consistent and create the foundation for what you want to include.  When you look at a noteworthy annual report, you’ll find that the organization has covered the following key points:
  • A clear mission and focus. If you could boil down your organization’s values and purpose into a single sentence you would have your mission statement. Since supporters won’t be the only people reading your report, your mission statement needs to be at the very beginning. Readers should know about your organization’s mission and what change you hope to make before jumping into the data.
  • A list of projects you initiated. From fundraising events to volunteer efforts to community programs, let readers know what your organization accomplished over the course of the year. The majority of your report should focus on these projects, breaking down your achievements into metrics your readers can understand.
  • A financial statement. Let’s face it: supporters want to know how their money is being used. Being honest about your organization’s expenses helps to establish trust among your supporters. Plus, it shows potential donors that your nonprofit can manage funds responsibly and effectively.
  • An account of major contributions. In addition to showcasing your organization’s success, your annual report is also about thanking those who helped you achieve your goals. Listing out and thanking your major contributors, influential staff, and board members should be a necessary part of our report.
Throughout this article, we’ll expand on how your organization can make these elements exceptional, but for now, look at this example of how a hospital can explain their mission in a moving way: In our example, Inner City Hospital has displayed their mission statement predominantly and included their history to give readers context.  

3. Focus your annual report on your donors’ accomplishments.

As we’ve mentioned before, your annual report is a chance to present all the good your nonprofit was able to accomplish. That being said, it’s easy for nonprofits to get stuck in the mindset of congratulating their accomplishments without focusing on their donors’ support. Instead of centering your report on your achievements, make it about your donors. This goes beyond switching the language of your report to address your donors. A nonprofit annual report that puts donors first focuses on how projects and programs were realized because of your supporters’ donations and time. For example, your annual report can focus on the many volunteers that donate their time to your organization like in the image below: In the volunteer section of this report, the hospital focuses on recording statements from volunteers and displays images of them helping patients. Alternatively, when you talk about the various projects your organization has implemented, make sure to mention the campaign that funded the project. Let readers know that your supporters helped you reach (or even exceed) your fundraising goal and how their funds and support impacted your cause. By showing readers that your accomplishments were achieved because of supporters, donors and volunteers know that you’re aware of all they do. Not to mention, it shows potential donors that your nonprofit is built on the support of passionate people. Therefore, your team should take every opportunity to direct attention to your supporters accomplishments.  

4. Use visuals in your annual report to keep readers engaged.

When your team creates your nonprofit annual report, they will compile all your efforts and data from the past year and condense it into a 10-page document. That’s a lot of information you want supporters and prospective donors to read! With so much information to convey, using visuals is a great way to turn information into an image that readers can easily understand. Plus, the more visuals, the more engaged your readers will be.  Think about it: if you were asked to read a report full of paragraphs of text, you’re likely to skim the information or give up after reading the first page. Once your team spends all their time and effort creating an annual report, you want people to read what you’ve put together. Visuals have many benefits, such as:
  • Breaking up blocks of text so the reader has a more enjoyable experience.
  • Transforming complex data into easy-to-understand information.
  • Conveying your cause in a way that puts your readers in the shoes of those you support.
After all, you’ve been tracking key fundraising metrics

read more

By chris

A Killer Q&A: Prospect Research Aids Annual Giving

Prospect research and annual giving go together like peanut butter and jelly, like Simon and Garfunkel, like Turner and Hooch. What I mean to say is that prospect research and annual giving are a great pair, and prospect research should certainly be used to assist your annual giving campaigns.

To best explain how the two fundraising components fit together, we’ve provided detailed answers to the 4 most common questions regarding the relationship between prospect research and annual giving.

read more

By donorsearch

Prospect Research for Public Radio Stations

Radio is a cultural stalwart.  It has outlasted its naysayers. When television came along people thought radio would disappear. It survived. As the internet rose to prominence, people tried to knock radio once again.  It survived. Listeners can now find their favorite radio stations in the car, on the computer, and even on their phones. Radio has diversified itself as it has grown, and public radio stations are no exceptions.

By donorsearch

Annual Giving: Prospects and Approaches

For most nonprofits, annual giving campaigns generate the highest number of gifts though major giving campaigns can provide more total revenue. Annual giving campaigns can generate loyalty as well as revenue, and are flexible and relatively cost-effective. Certain philanthropy and wealth markers can predict the best prospects for annual giving campaigns, including previous giving, giving to other nonprofits, high dollar real estate ownership, and other factors. Because annual giving and major giving campaigns have different goals, strategies, and resources, both can be managed concurrently:

Annual Giving Defined

Annual gifts are gifts solicited and given on a regular, on-going basis, and are typically unrestricted (that is, available to a nonprofit for any use). Some organizations conduct a campaign annually, some quarterly, and some follow a different schedule. Unlike a capital campaign, which is typically a campaign to raise funds for a specific, tangible goal (new equipment, new facility, new program), or a major giving campaign, which cultivates only large gifts, an annual giving campaign concentrates on generating a large number of smaller gifts. Usually, funds from annual giving campaigns are used for day-to-day operations, paying debts, and other ongoing budgetary needs. For many nonprofits, annual giving represents the majority of gifts received, surpassing the number of gifts received from major and planned givers and events.

Benefits of Annual Giving

  • Donations are normally unrestricted and can be used for any purpose
  • Campaigns can be conducted at any time
  • Prospects can be segmented, and multiple strategies can be used to involve board members, staffers, and volunteers
  • Campaigns offer opportunities for ongoing communications with prospects
  • Annual campaigns build donor loyalty
  • Annual campaigns are the best introduction to the nonprofit for a new donor
  • Income is relatively predictable in terms of amount and timing
  • Pledges and other strategies can provide an ongoing revenue stream
  • Campaigns can be easily modified at any time

read more