07/01/2022 | Fundraising Best Practices | Gabrielle Gean
How a Great Annual Report Can Support Your Fundraising Goals
Preparing an annual report is indeed a lot of work. However, it is one of your nonprofit’s most critical pieces of marketing material and when done correctly, can play a significant role in your fundraising strategy.
Annual reports allow your nonprofit to communicate the impact of your work and donors’ contributions towards the cause that you are fighting for. It can demonstrate your organisation’s efficacy and ability to achieve your mission, acknowledge funders, donors and volunteers – and inspire audiences to take action. Ultimately, you can use it to cultivate new partnerships with major donors and sponsors, as well as to recognise those who have assisted you in reaching your current goals.
The level of excellence of an annual report can mean the difference between exceeding or potentially missing your mark in meeting your goals for the coming year. With so much at stake, it’s critical to take the annual report seriously—and to seek guidance if necessary. You’re probably working on your next annual report right now, so we’ve consolidated some helpful tips and best practices to inspire you in making this vital report work.
1. Prioritise your supporters – less ‘we’, more ‘you’
Girls Who Code show their supporters that they are indeed, the hero.
When you write about your nonprofit’s biggest accomplishments, always put your supporters first. For example, your annual report should highlight how your supporters contributed towards the goals or campaigns of the year: “With your help, more than 1,200 disabled but talented students have received a scholarship to fulfil their potential in school,” “Through your generosity, we delivered clean water to 10,000 people in Balochistan,” and “In 2021, you made an impact of helping 3,000 sick and street pets.”
When proofreading your annual report, try to read it from an external perspective. Do the achievements read as something that were made possible by the communities and individuals who have supported you? Or does it sound like they were accomplished without help?
2. Let your donors and volunteers tell the story
ZOA featured donor and refugee stories in a way that showcases humanity and also results, without being too wordy.
Nothing inspires people to donate and volunteer more than peer influence. Include a case study of a consistent supporter, a profile of a major donor alongside the project they supported, or a lovely volunteer photo with a quote about why they are involved. Including more “real-life experiences” helps your audience retain the knowledge and easily understand the figures without too much dry information.
Look for ways to humanise your nonprofit in every aspect of the annual report. To demonstrate your personality, write in your brand voice and acknowledge your supporters. Make use of supporters’ opinions, whether they are your employees or donors. Include anecdotes that are interesting or entertaining and show who you are. This is one of the most effective methods for transforming a dull report into a lively piece of content.
3. Use powerful and beautiful media
Video is an excellent way to convey your many highlights, succinctly.
Your annual report should elicit emotions. Think about it, who would read a 60-page report with only words and stock pictures? Thus, your work as a nonprofit should rely on tapping into people’s emotions. Which as a result, may improve your chances of raising funds and support. Include emotive media (of your work, volunteers, and staff) and interesting infographics that make data-heavy information easy to digest. Take the opportunity to also showcase your mission in action.
Check out this great example from WWF.
4. Consider creating a digital experience
Digital reports, as opposed to traditional annual or interim reports, can be far more user-friendly and relevant to your audience. The visual appeal, storytelling, and emotional triggers have been shown to increase the amount of time audiences spend engaging with your annual report. With digitalisation, it is also easier to optimise your report’s findability (SEO) as well as to measure and analyse how it performed in terms of viewership.
5. Use Management Discussion & Analysis (MD&A) to your advantage
A descriptive MD&A is essential in informing the public about your nonprofit’s effectiveness, as it provides key information on how a company is performing financially. An MD&A narrative should accompany your nonprofit’s financial statements in detail and provide information about why the numbers appear the way they do, as well as your organisation’s future projections and strategies to address any challenges that can lead to potential failure to meet those projections. A word of advice, ensure that the audit committee is aware of the sources of any information included in MD&A disclosures (except those derived from the financial statements) to avoid misleading information.
Related topic: Are Social Causes Enough to Connect with Donors?
6. Be proactive in sharing
Honesty is the best policy in any organisational reporting, especially for nonprofits. If you’ve had a difficult year, say so. However, use it as an opportunity to discuss how you overcame those obstacles and how your supporters assisted you. Some programs will not go as planned, but this is an opportunity to demonstrate your willingness to innovate and try new things, as well as what you learned, and how you will apply those learnings in the future.
All things considered, keep in mind that you are a key stakeholder in the creation of this document as a fundraiser in your organisation. Apply a donor lens to it as it’s being created; will this annual report make donors feel appreciated? Does it show them how their money is used to make an impact? Does it project a hopeful future which will motivate them to continue giving? Does it demonstrate your own board of directors and leadership team’s commitment to your nonprofit’s mission?
Tip: Sometimes your strongest story will come from the milestones you have achieved throughout the years.
Lastly, remember to consider the channels through which you will share the annual report with your existing and potential donors – direct mail, email and a website download are all viable options depending on your audience’s preferences and your organisation’s policies. Hopefully, you can also create more opportunities for this piece of important document to be shared – so that you can extend the longevity of the report beyond just the time of release.
If you’d like to learn about what a digital annual report or impact report could look like for your organisation, reach out to us.
You might also be interested in: 6 Books Every Nonprofit Leader Should Read