A nonprofit annual report, also called an impact report, provides a special opportunity to share stories, statistics, and images that demonstrate a need in the community and how your nonprofit organization effectively addresses that need. Taken together, they show donors and the community at large the impact that your organization’s work has made and can continue to make with their help.
This report pulls together all the details to display fiscal solidity and showcase successful program delivery. It demonstrates that your organization has been doing what it said it would do—and is doing it well! Though an annual report is not a fundraising appeal in and of itself, a well-crafted report can result in increased future gifts.
In this guide, we’ll show you how to share your organization’s impact with an engaging nonprofit annual report template and explore best practices. Let’s get started by breaking down each key component of an effective annual report.
Nonprofit annual report template
Annual reports are highly flexible. Depending on your organization’s resources, needs, and preferences, your annual report could take a number of different forms. Whether you choose to make your report a multi-page PDF, an interactive website, or a postcard, follow this basic structure to create an annual report that covers all your bases and appeals to every member of your audience.
Executive letter
Start your annual report off by personally addressing your audience. Annual reports can have a number of target audiences, so make sure your letter encompasses:
- Current donors who are interested in seeing how their gift was used.
- Potential donors who are researching the organization.
- Foundations and grantmakers you may apply to for funding.
- Partner organizations and potential partners looking to get the information they need to report on collective impact.
- Elected officials, community leaders, faith leaders, and local businesses.
In the letter, express gratitude for everyone involved in the year’s efforts, highlight your main accomplishments, then bring the focus back to your organization’s purpose. Introduce the annual report to readers, and close with your executive director’s or board chair’s signature.
Board and staff
List the names and titles of each of your board members and leadership staff somewhere close to the beginning of your annual report. Seeing your board and leadership builds credibility with your readers that your organization has talented, dedicated people at the helm.
If you have a staff member that is new or uniquely qualified in a particular area, you might consider writing a brief profile on them and including a photo. You could also include a quote from a board member about their passion for the organization to demonstrate your leadership’s dedication.
Outcomes and impact
In the next section, use easily digestible charts and infographics to illustrate:
- Specific outcomes of your work. For instance, include the number of people or animals served, programs delivered, meals distributed, or lives saved.
- Your impact. Impact is a deeper look at what your organization has accomplished. Instead of how many, impact considers how well. A good way to illustrate impact is to share short stories, images, and perhaps direct quotes from someone your organization served that describes a scenario where you helped create lasting change.
When showcasing your impact, you can also discuss any changes you made to services or programs in the past year. Explain the reason for the changes and how they impacted your success.
Founding story
Your nonprofit’s annual report is a place to show the important need your organization addresses, and sharing your organizational history is a natural way to do so. Briefly describe the need your nonprofit’s founders saw in their community and how you came together to address it.
Incorporating vibrant photos depicting the people you serve or showcasing program delivery is an effective way to grab readers’ attention and connect them with your story and purpose. If your organization does not have access to a graphic designer, programs like Canva can make laying out the look of the annual report relatively easy for any team member.
Financial report
Your financial report is one of the most important parts of your annual report. Along with fundraising results, the amount spent on programs is a number that many audiences will want to see.
Include graphs, pie charts, or infographics that make complex financial information from your Form 990 easily understandable for supporters. Use visuals that depict how much money was brought into the organization and spent via different avenues such as:
- Individual donations
- Business support
- Donated goods and services
- Operational costs
- Events
- Grants and municipal support
- Administrative and operational costs
- Fundraising
- Marketing
- Staff training
With software to help you easily organize and visualize your financial information, graphs like these are easy to make and do wonders to paint a fuller financial picture for your supporters.
Supporter profiles
What are the stories, testimonials, or images that best illustrate your core messages? Are there supporters whose stories about their work with your organization will embody the programs you run and the impact you make?
Let your most vocal supporters help you get the word out and expand your community. Choose a supporter to highlight, then reach out to them to record their stories and thoughts. Profiling a donor, volunteer, or advocate not only publicly acknowledges their contributions but also allows readers to connect with the experience of donating to or engaging with your organization and picture themselves doing so.
Consider adding a small section dedicated to your volunteers as well. List the total number of volunteers and detail the initiatives they participated in. Include photos of volunteers in action, and look ahead to any planned volunteer events coming up next year.
Donor list
Some nonprofit organizations choose to list donors in their annual reports as a way to both thank donors and show the community the strength and breadth of the support the organization receives.
You can divide this list into sections for:
- Individuals
- Corporate sponsors
- In-kind donors
- Foundations
- Legacy donors
Many organizations will group donors by the amount of their donation, while others will use a simple alphabetical list. In either case, you may decide to only include donors who have given above a particular amount, typically to save space.
Bonterra Donor Engagement’s Guided Fundraising solution (formerly Network for Good) makes pulling donor lists easy, no matter how you plan to list them. Its powerful filtering capability makes it simple to generate lists for a wide variety of supporter types. With a few clicks, user-friendly filters can be set up to generate donor lists in a wide range of categories like donation history, location, and gift size.
Final words
As an optional last step, you can write a brief statement that expresses your gratitude once more and looks to the future.
The end of your annual report is also a great place to add your contact information, including links to your nonprofit’s website and social media profiles.
Nonprofit annual report best practices
Now that you know the basic structure of annual reports, take a look at these best practices for making your nonprofit’s annual report compelling and useful:
- Aim to be clear and concise. You may have a lot you want to share, but remember that less can be more in our information-overloaded world. Focus on only the most important messages. Charts and infographics, as well as appealing graphics that convey the essence of your work, should play a key role.
- Publish your annual report in the first months of a new fiscal year. Once the previous fiscal year closes, it is time to run your filters and determine what data will be included in the report.
- Consider making your annual report digital. If hard copies aren’t in your nonprofit’s budget, online or PDF annual reports are a great alternative. A digital annual report is not only much less expensive to produce, but it’s also easier to share with a wider audience and provides more opportunities to illustrate your impact through images, videos, and links.
- Share your annual report far and wide. Along with sending your annual report to supporters via direct mail and email, you can upload a version to your website and post highlights from the report on social media. You can even upload it to centralized nonprofit data repositories like Candid for wider public access.
- Use your report’s stories, images, and impact statistics in other marketing materials. In bite-sized form, these can be used in many ways to share your core messages, such as in social media posts, talks and slide presentations, or appeal letters.
Your annual report should tell the story of your organization’s purpose and accomplishments, and it should recognize the people who make it all possible. Using our template and tips, it can also provide information to demonstrate your prudent management and bolster your credibility.
The main goal of nonprofit annual reports
An annual report can be a valuable tool and an important piece of your overall communications and fundraising strategy. But remember that it is just one piece! After showing your supporters all the progress you’ve made in the last year, it’s time to start working towards more change in the coming year.
