Your nonprofit files an annual report each year. The Form 990 is the required report that organizations like yours need to file in order to maintain your tax exempt status.
However, many nonprofits also choose to publish another annual report. This report is supporter-facing, providing more than basic financial information the IRS needs to ensure credibility. It discusses and provides context for your organization’s accomplishments, progress, and other mission-related activities that supporters might be interested in.
Traditionally, these reports have taken the format of a book or multi-page paper report. Now, it’s becoming more and more popular for nonprofits to transition from the traditional paper report to a modern digital alternative.
Digital annual reports allow nonprofits to distribute more copies inexpensively and to broaden the reach of the report, making it available to more interested readers.
The Bloomerang complete annual report guide explains that some organizations still find value in printing a small number of book-formatted annual reports. These can be sent to audience members who prefer this format or to local doctors and lawyers for waiting room reading. However, many of your audience members will prefer the digital format, so you’ll need to be sure to transition smoothly. Here’s what we recommend for the transition:
- Consider Your Audience
- Choose Your Platform
- Craft Your Message
- Analyze Results
Annual reports can be powerful marketing tools when they’re well-crafted. Make sure your organization is making the most of this powerful document, especially as you make it more widely available to your audience.
Consider Your Audience
Before you dive into the creation of your new digital annual report, you need to make sure that your audience will enjoy and respond well to the changes. After all, this report is meant to increase your level of transparency and engagement with supporters. If they don’t engage with the format and the content, you won’t be able to maximize your use of the document.
The first thing you should do, therefore, is to consider your organization’s particular audience. You might decide to ask yourself:
- What marketing platforms have been effective in the past? Knowing what platforms your supporters have engaged with in the past can provide insight into which types of platforms they may engage with in the future, helping you decide if it’s the right time to transition to a digital annual report. For instance, if your supporters primarily engage with direct mail, you might be better off with a physical report. However, if they engage with your website, email, and social media, now might be a good time to make the switch.
- What is the audience’s preference for the annual report? If you’re not sure if your audience will prefer the digital annual report to a physical alternative, just ask! A survey can help you understand exactly what supporters want to read and how they want to receive it moving forward.
- Who currently receives and reads your annual report? In addition to reaching new audiences with your digital annual report, you’ll want to retain the audience you already have reading it. Check your database to see who currently receives the report. Then, you might ask them if they’d prefer a digital alternative. You might even decide to continue printing a few physical copies if your current recipients prefer reading on paper.
Some of this information will likely already be available in your nonprofit CRM software, such as current annual report recipients and other marketing platform engagement. However, some information might be new, such as the opinions and interests of your supporters. To gain these new insights, you might decide to send out a survey to supporters. Be sure to save these survey results in your database for future reference as well.
Choose Your Platform
Digital annual reports come in a variety of formats. There are plenty of options available for your organization to choose from in order to best reach your target audience. When you’re choosing your platform, be sure it will engage your recipients and allow them to view the most important information right up front.
Engaging your audience is key in whatever platform you choose. After all, you don’t just want them to see the report and immediately click away from it on their computers. You want to compel them to read the report in its entirety, drawing them in with graphics and dynamic content.
Consider what you’ve learned about your audience. What type of content will they most appreciate and engage with? Here are some of the digital annual report options you might consider:
- PDF version of your physical report. This can be a tempting option for organizations that have gotten used to sending out physical copies of their report. However, it’s more challenging to maintain readers’ attention on a screen than on paper, so they may lose focus more easily when reviewing a simple PDF version of a report. This option is best used in conjunction with a physical report so that more people can review the content than just your usual recipients.
- Video annual report. Video annual reports are very trendy right now. You can cut together images and clips from events, programs, and campaigns throughout the year and play them in succession along with some upbeat music. You can also voice over the video, citing key metrics and facts as the analytics appear on the screen. If you choose a video annual report, be sure to invest in professional video equipment—the report shouldn’t look like a home movie.
- Dynamic online content. Dynamic online content is one of the most engaging forms a digital annual report can take. By leveraging different photos, video clips, charts, and “clickable” content, you can captivate supporters and draw them into the content. Essentially, the report takes the form of a microsite, allowing supporters to click through to the sections that most interest them, as you can see in examples like this.
During your first year or two of transitioning your annual report to the digital realm, you might decide to also send out a mailer containing some key information with directions to view the entire report.
This strategy provides an easier transition for your audience who has gotten used to receiving the annual report in the mail. They’ll still receive the mailer, but they will be directed immediately to the new version.
Craft Your Message
The message for your annual report is the meat of it all. Crafting a message for a digital audience is a little different than doing so for someone reading on a physical sheet of paper.
On a screen, people are more likely to prefer short paragraphs, skimmable content, and lots of images and pictures to break up big blocks of text. Meanwhile, on paper, you’re more likely to get away with more text on a page while still holding your audience’s attention.
However, there are several characteristics your annual report must have no matter what platform you craft your message on. Make sure your nonprofit’s annual report is:
- Detailed. You should provide information that your supporters will find engaging, while also providing context behind some of the metrics you’ll share. For example, you might discuss one of the successful fundraising campaigns you had during the year, then tell a story of the resulting project to demonstrate its impact.
- Transparent. It’s much better to be up front about anything that went wrong at your organization than to work to cover it up. It will likely cause questions or concerns if you aren’t transparent with your supporters. If you did have a mistake or a failed campaign this year, explain that it occurred in your annual report, then discuss how you have fixed (or are fixing) the situation. This will build trust among your supporters.
- Donor-centric. Essentially, your annual report should act as a pat on the back for your supporters, allowing them to see how far their funds were able to take the organization. Thank your generous supporters and explain the immense impact they were able to have on your nonprofit’s mission.
Your annual report should fit smoothly into your organization’s larger strategic plan. Most often, it’s used as a stewardship tool to explain to supporters the part they played in the mission and to build trust between them and your organization. That’s why it’s so important to craft your message carefully and openly in order to fit into this larger plan.
As you’re getting started crafting your message, you might decide to leverage examples and templates to get an idea for how you’ll present various aspects of the report. We recommend looking through both examples of other annual reports and examples of thank you letters, like those you can find here.
Thank you letters are some of the most donor-centric marketing tools available, so using the same type of language when crafting your annual report message is a great way to show appreciation for your valuable supporters.
Analyze Results
When you craft physical annual reports, it’s challenging to collect metrics on who actually reads through the information. However, it’s much easier for digital reports, making this a great advantage in the switch to digital reporting.
By tracking marketing analytics, you can see how impactful and successful your annual report has been with your target audience.
Your annual report is one of the most valuable marketing tools at your disposal. When you use effective digital analytic strategies, you’re more likely to make the most of the resource. In fact, according to AccuData’s guide on data marketing, “researchers have found that marketers who used data-driven campaigns experienced over 5 times ROI compared to the marketing spend to initially hold the campaigns.”
After you’ve established what role your report will play in your organization’s larger strategy, you can effectively track analytics that will help you improve over the years. For instance, you might choose to analyze metrics such as:
- Email click-through rates, helping you test the effectiveness of your marketing for the report itself.
- Percentage of readers who reach the end of the report or click on every page. Tracking software can help you understand what pages supporters are most interested in.
- Which supporters are reading your report, so that you can broaden your reach as much as possible.
- A/B test results so that you know which visual design, message, or other elements are most effective for your particular audience.
Track your data for your campaign year after year. While the first year’s information can provide some insights for potential improvements, multiple years allow you to see trends. This is useful information that can help your organization determine what elements make a successful annual report.
Even though your organization’s annual Form 990 is a publicly available document, you can engage supporters more effectively by creating your own annual report with additional context and information. This allows you to craft the message and achieve specific goals that are a part of your strategic plan.
Digital annual reports are even better for the majority of organizations. When you consider your audience, choose an engaging platform, craft a well-thought-out message, and collect analytics, you’re able to best set up your organization for success.
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A guest post from Jay Love of Bloomerang. Jay Love serves as the Co-Founder and Chief Relationship Officer at Bloomerang. Prior to Bloomerang, he was the CEO and Co-Founder of eTapestry for 11 years, which at the time was the leading SaaS technology company serving the charity sector. Jay and his team grew the company to more than 10,000 nonprofit clients, charting a decade of record growth.