There’s a lot of misconception in the nonprofit world about the differences between annual reports and impact reports. While there is some overlap between the two, they are very different from one another.
What is an annual report?
An annual report is usually created and published by a nonprofit once a year. Usually, this “year in review” is a bit of a longer document. It can entail yearly financials, impact, progress, event recaps, highlights, and more. Annual reports tell the story of your organization over the course of an entire year.
Because reporting is often an onerous task, many nonprofits condense all their impact into this one yearly review. It’s a great tool for marketing your progress and building ongoing relationships with supporters and potential new partners. Plus, it’s an excellent way to emphasize your mission and values.
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What is an impact report?
Unlike an annual report, which includes more “big picture” information about the organization, impact reports focus on one element—you guessed it, the impact.
This report is usually a bit smaller than the annual report and refers to more of a “snapshot” than a comprehensive review. Usually, this type of report is much more acute in nature, showing donors more of a quick overview of the impact of a specific program or initiative. It allows contributors and supporters to see their donations make a difference in a “real-time” scenario.
In an annual report, donors are catching up on an entire year’s worth of information. With an impact report, stakeholders can see the shorter-term impact of their contributions. This allows them to feel like they’re more intimately involved with the outcomes.
Which is better?
Both the annual report and the impact report, while similar in some regards, are often used for different purposes. While every nonprofit should have an annual report, to showcase all their progress over the course of an entire year, an impact report is always a helpful touchpoint with donors (especially if they’re done on a regular basis). If nonprofits have the time and resources to commit to creating both, the combination can be killer.