A nonprofit annual report is an important document used to engage the nonprofit’s community of donors, volunteers, and partners. The report serves as both an effort in transparency and promotion, encouraging each stakeholder to renew their enthusiasm for the shared cause and trust in the nonprofit to fulfill its mission.
Financial details help donors feel confident that their donations are being properly allocated in accordance with the articles of incorporation, while volunteers should see the greater results of their individual work reflected in the year’s accomplishments.
Board members compile the nonprofit annual report, which includes summaries of financial management, goals, achievements, and ongoing projects.
Whether your nonprofit is new or you’re new to preparing a nonprofit annual report, this guide outlines the process.
What is a Nonprofit Annual Report?
A nonprofit annual report is a document that nonprofits create to showcase an organization’s activities, achievements, and financial performance over the past fiscal year. The annual report serves as a valuable communication tool between the organization and its donors, volunteers, board members, and the general public.
In most cases, boards present their nonprofit annual report at an event. They share a message from the organization’s leadership, highlights of the year’s accomplishments, financial statements, and information about future goals and initiatives. Because a nonprofit is a legal entity, the state may require certain information be in the report.
Annual reports are often designed to be visually appealing and engaging, using photos, infographics, and stories to convey the impact of the organization’s work. The report plays a crucial role in demonstrating transparency and accountability to stakeholders, helping to build trust and support for the nonprofit’s mission.
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How to Write a Nonprofit Annual Report
Writing a nonprofit annual report requires collecting the key information and carefully preparing a document that can also be conveyed as an engaging, even inspiring, presentation.
1. Gather Information
First, gather the salient details of your nonprofit. This includes:
- Financial records regarding income and spending for the previous fiscal year
- Reports from your projects and charitable initiatives, noting the effort taken, budget used, and progress made through the last year
- Total donations and volunteer hours, broken down by groups, regions, or projects
- Summaries from key board members and community leaders
2. Define the Report’s Structure and Content
Once all your data is available, draft the report’s structure. The exact order is your choice to make. Arrange the content and facts in an organized fashion so it can be presented in practical and easy-to-understand categories.
It can help to use a nonprofit annual report example or template to arrange the report document and the presentation that will be built from your report.
3. Craft a Compelling Narrative
Turn your data into a story. Nonprofits are all about the shared cause. Determine how to present the year in summary as a compelling narrative that your entire community of stakeholders will find inspiring.
Interlace examples and testimonials to bring the data to life, exploring the real difference that each project has made, not just the hours and resources spent on every charitable endeavor.
4. Incorporate Visuals and Data
Now, make it visually compelling. Add photos and charts of the data to illustrate the most important or complex elements of your report. Charts are useful in showing growth and clearly conveying financial data in a way that your entire community can understand. Photos show the real-world efforts and impact of your projects.
5. Review and Edit
Lastly, review your completed document and allow yourself to edit. Fix phrases that could be stronger. Rearrange sections to create a better narrative or more clearly present your data. Add or update charts to better convey the data.
Then, build your event presentation based on the document that will be distributed to stakeholders as part of the annual report event hosted by board members and attended by every stakeholder who cares to participate.
Getting Started With OnBoard
Preparing an annual report can be a large and heavy task. Fortunately, nonprofit boards tend to tackle this task together, each taking on a few elements to gather information, prepare summaries, and ensure that obligations are met.
Organizations that use board portal platforms have a head start when it comes to compiling annual reports or board packs. OnBoard, software purpose-built for nonprofits, provides a central location for all board data. Among its robust features are drag-and-drop agenda and meeting builders, direct messaging, and the ability to add notes and annotations while reviewing documents.
If you’re considering a board management solution for your organization, we recommend downloading our free guide: Board Management Software Buyer’s Guide. Inside, we give you the tools and resources to find the very best board portal for your board.
The comprehensive blueprint for selecting a results-driven board management vendor.
Ready to upgrade your board’s effectiveness with OnBoard the board intelligence platform? Schedule a demo or request a free trial.
About The Author
- Gina Guy is an implementation consultant who specializes in working with nonprofit organizations get the most from their board meetings. She loves helping customers ease their workloads through their use of OnBoard. A Purdue University graduate, Gina enjoys refinishing furniture, running, kayaking, and traveling in her spare time. She lives in Monticello, Indiana, with her husband.
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