Everyone from major donors to grantmakers, charity watchdog groups to the government, will read your not-for-profit’s annual report and use it to make important decisions affecting your organization. So you need to make sure it’s professional, substantive and accurate — and interesting enough to grab and keep readers’ attention.

Cover the basics well

Most nonprofit annual reports consist of several standard sections, including:

Chairman of the Board’s letter. This executive summary should provide an overview of your nonprofit’s activities, accomplishments and anything else worth highlighting.

Directors and officers list. Make sure all names, professional affiliations and designations are accurate and spelled correctly.

Financial information. This generally is subdivided into three sections:

1. The independent auditor’s report, which states the CPA’s opinion about whether your nonprofit’s financial statements have been prepared in accordance with Generally Accepted Accounting Principles.

2. The financial statements, which include a Statement of Financial Position (assets, liabilities and net asset categories as of the last day of the fiscal year), Statement of Activities (revenues earned and expenses incurred during the year) and Statement of Cash Flows (changes, sources and uses of cash for the year).

3. The footnotes, which expand on financial statement items regarding such subjects as leasing arrangements and debt.

You can make your financial statements easier to understand by creating an abbreviated version with a synopsis that quickly gets to the heart of the matter. Where applicable, use simple graphs and diagrams to highlight specific points.

Get creative

The “Description” is the other major section in a typical annual report, and it’s where you can — and should — get creative. First, explain your organization’s mission, goals and strategies for reaching those goals. Then, describe who benefits from your organization’s services and how they contribute to the community.

So that your report does justice to this work, include client testimonials where those you’ve helped tell the story in a personal way. Or create a timeline that enables readers to see the progress you’ve made toward a long-term goal.

Your annual report should be as visually pleasing as it is interesting to read, with engaging photos, arresting graphics and creative layouts. Make sure your graphic designer has experience with annual reports — preferably those of nonprofits — and understands the values and image your organization wants to convey.

Make it powerful

Some of your nonprofit’s communications are of interest only to a small group of your supporters. But most of your constituents will read your annual report, so invest the time and make it something they’ll enjoy reading. Contact us for more information.

© 2017

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