The end of the year is one of the busiest periods for your nonprofit fundraising team. Not only is it one of the times when donors are most generous, but it’s also a time when you’ll compile statistics, impact data, and fundraising data from the year to summarize your successes and identify opportunities for the future.
Much of the information you gather should be compiled into an annual report and distributed to your organization’s loyal supporters. This report keeps them in the know about your nonprofit’s general state, and it can also help retain these supporters for the long haul.
In this guide, we’ll discuss three best practices for compiling your annual report, pulled from Bloomerang’s annual report guide. Specifically, we’ll touch on how these best practices can help improve your relationships with your donors and increase your long-term donor retention rate.
Here are the annual report best practices we’ll cover:
- Communicate organizational impact.
- Prioritize transparency with supporters.
- Create a digital format to reach broader audiences.
Your annual report can do more than tell your supporters how your nonprofit’s programs and campaigns progressed throughout the year. Follow these strategies to get the most out of this useful tool.
1. Communicate organizational impact.
When donors give to your organization, they want to help you achieve your mission. Show them the direct impact their donations have on your mission to highlight how they’re making a significant difference.
Imagine a supporter gives to your initiative that supports music programs in schools. When you tell the supporter how their donation helped the middle school start a band, they’ll feel good about their contribution.
Because you showed that your nonprofit used their donation to carry out your mission, that same donor may also be interested in supporting an initiative that improves physical education in schools. Just by communicating impact, you’ve secured additional funding and retained a donor.
When communicating impact in your annual report, you should:
- Cite statistics that demonstrate the program’s impact on the greater community. For example, your nonprofit would want to share that 40% of the students in a particular district now have access to music classes in school thanks to your donors’ support.
- Use storytelling strategies that pull the heartstrings of supporters and help them remember your impact even after they finish reading. According to Getting Attention’s storytelling guide, people are much more likely to remember a story than a statistic. So, while you’ll want to share statistics with your supporters, you should tie them to specific stories when possible. For example, you could tell how their donations helped your nonprofit provide a student with a tuba that they can play in the school’s band.
Remember, when communicating impact, make sure to thank all of your supporters. You might even include thank-you messages directly from leaders within your organization, such as your executive director or chief fundraising officer.
2. Prioritize transparency with supporters.
Supporters who donate to your nonprofit trust that you’ll use the funds they contribute to reinvest in your mission and do good work in the community. Your annual report provides an opportunity to share exactly how you’re doing that with them.
Acknowledge your organization’s wins and challenges throughout the year. Also, consider including specific financial information. Your organization isn’t strictly required to include financial data in your annual report—in most cases, your only required financial statement is your Form 990. This form is publicly available, so supporters can look it up to review your finances.
However, it can be helpful to include the highlights of your financial situation for supporters to see the information clearly. You can also use your annual report to provide more context for the information in your Form 990.
Supporters will appreciate your efforts to make your financial reports more transparent. This can increase donors’ trust in your organization and make them feel comfortable supporting you again in the future.
3. Create a digital report to reach broader audiences.
Some supporters may want to read your report in a different format than the printed version you’d send via direct mail. Younger donors (including Millennials and Gen Z) are especially drawn to digital engagement opportunities. Give them an additional way to view the information you want to share by creating a digital annual report option.
Present the information in a way that’s easy for supporters to understand. For instance, incorporate these elements into your digital annual report:
- Infographics that spotlight important statistics
- Video testimonials from your nonprofit’s leadership, volunteers, or the people you serve
- Photos from your organization’s events, volunteer opportunities, and other gatherings.
You can keep track of which supporters prefer which annual report format in your donor management software. In addition to sending the annual report in different formats, we also recommend creating a downloadable version of the report and putting it on your website for anyone to access.
By offering a few different annual report options, your organization can engage all of your donor segments, helping you reach and retain more supporters.
Your annual report is an important tool that you can use to communicate your nonprofit’s impact. Use the tips above to create a report that helps build relationships and retain your supporters. Supporters will appreciate your ongoing efforts to offer transparency and appeal to their interests.