Whether you’re new to the nonprofit world or a seasoned veteran, annual reports can often feel both daunting and complicated. Despite being a necessary element to nonprofit work, it’s not always clear what the purpose of an annual report is, or what should be included in it. Understandably, nonprofits want to ensure that their investment in any project, especially one like the annual report, is worth their time and energy.
So, if you’re curious about what an annual report really is and what it accomplishes, keeping reading—we’ll help break down all the basics.
What is an annual report?
Think of an annual report as a “year in review”—like a yearbook of sorts, but for donors, supporters, and partners to take a look at the highlights of any given year at your organization. Of course, a lot can happen in a year (nonprofits know that best), but with an annual report, you can summarize all of the year’s milestones including your impact, accomplishments, new developments, and more.
Annual reports can be created and presented in a variety of ways—both digitally and in print. Depending on the needs, audience, or even constraints of the individual nonprofit, you might choose to create a printed booklet or pamphlet (which could then be mailed to supporters and donors or handed out at events). Or, in line with more frequent developments in the space, you could turn to digital creation—by using platforms like Yearly, nonprofits can easily and more effectively create an annual report that intrigues readers with more vibrant visual elements like photos, videos, and crisp layouts.
Why is an annual report important?
An annual report is a great opportunity to show your donors exactly where and how their money is being spent. It also gives them and other supporters a unique opportunity to view the inner-workings of your organization. By showing your communities your detailed financial information, stories of impact, successful initiatives, and more, your nonprofit will create trust through transparency.
Think of it as a win-win—your supporters feel good about their donations and ongoing partnerships, and you feel good letting them know that their contributions are funding your mission in real, meaningful ways.