What is a non-profit annual report? Why do you need one, and what goes in it? In this video
we're going to talk all about how to create an annual report for your nonprofit or social
enterprise organization that will keep inspiring your donors your volunteers and members of the
general public to support your cause year after year. Welcome or welcome back! I'm Amber Melanie
Smith. I'm a non-profit founder and executive director and love to make these videos on YouTube
all about those topics: starting a non-profit, fundraising, making a social impact, and more.
Don't forget to give this video a like if you find it helpful, subscribe to my channel for more
content like this, and ring the bell for alerts for the next time I post a video. If you're also
looking for resources on starting a non-profit or how to develop a sustainable fundraising plan
be sure to check out the trainings on my website, FounderToFullTime.com. Okay, I want to get started
with a little bit of a refresher for those of you who are new to this concept -- what is an
annual report, and why does your organization need one? Why is it a good idea for your organization
to publish an annual report each year? So in essence, an annual report is a report that you
would publish and distribute to your stakeholders - so probably your volunteers, your donors, your
leadership team, and their associates, and the general public. And this report includes an update
on your organization's impacts from the year prior as well as your organization's financial
status and status of your goals. This is not to be confused for your organization's annual filing,
which at least in the U.S.A. is the document that you would complete and submit to the IRS - it's
essentially your annual taxes. So why do you need an annual report? Well it is a good idea always to
keep your general public your community informed of what your organization is up to, but an annual
report is a great marketing tool that you can use to showcase all of the good work that you did and
all of the good that you accomplished in the year before and send that out to your folks. So this is
a tool that you can use to basically help people feel justified in the support that they gave you
whether that was through giving their volunteer time, or donating their dollars to your cause,
it helps them see essentially what you're able to accomplish with the resources they invested
in your mission. A good annual report will also help you build trust with your supporters,
because among other things, one of the things that you will include in your annual report
is your financial status. This is typically the revenue that you brought in and some of the things
that you spent the money that you raised on to achieve your nonprofits mission this level of
transparency really helps the general public and your supporters feel like you are accountable to
them so those are the basics around what an annual report even is and what's purpose is what how it
helps your organization let's talk a little bit about the logistics around when you would send an
annual report typically organizations will send out their annual report and publish it
publicly about one or two months after the end of their fiscal year so if you are on a traditional
calendar year for your organization's fiscal year that would be January through February, I'm sorry,
January through December, and then you would publish your annual report probably sometime in
the January to march time frame of the following year and of course as we've talked about in other
videos your fiscal year can be any 12-month period that suits your organization and its
cash flow so you could say it's July through June you could say it's April through March,
it really doesn't matter, but as I said you're probably sending out this annual report a couple
months after the last month of that fiscal year each year. What format should your annual
report take? Let's talk about some options. Traditionally annual reports that I've seen
are a pdf document and this is something that could be either printed and mailed out through
snail mail or emailed or linked to on your website but more and more there is a movement towards
different and more online accessible annual report formats so what I mean by that is just
that you might choose to build your annual report right into a web page on your website
and the advantages of this of course are it's a little easier to view online and it encourages
sharing because people can just grab that link and pass it on to their friends and networks
of course if your organization happens to serve a population that is less internet savvy or has
less access to the internet than sending the snail mail copies to those folks is a way to make sure
you can keep them included in your reporting a couple of other interesting formats for
annual reports that we are starting to see include interactive clickable presentations on web pages
those are always fun infographics so reports that are more design and image heavy as opposed to text
heavy are always visually appealing in my opinion i personally really love this example from girls
who code their 2018 annual report is just beautiful and fun i will provide a link to
that in the description of this video if you kind of want to just check that out and get inspired
and some organizations are even experimenting with doing an annual report strictly through
a video format that includes you know obviously comments from their leadership but also data and
storytelling there are really a number of tools out there that you can use to create an annual
report for your organization i know i love Canva it has some great templates that you can check out
no matter what your level of graphic design skill may be it's a great resource and a lot
of the templates that they have are free also of course sometimes google slides or PowerPoint
is is great for that too and if you're going the video route there are a number of free or low cost
video editing tools out there for folks that don't necessarily need a lot of experience to know how
to properly edit those videos okay so at this point we've talked about what an annual report is
its purpose who it goes to when you would send it and some of the possible formats
for how you would create it now let's talk a little bit more in depth about what you're going
to want to include in your annual report for its content there's a little bit of flexibility here
and like i said organizations are getting creative about how they present their annual
reports so maybe you'll think of some other things that you'd want to include
but in general a typical annual report will include these six elements the first is a brief
message or letter from your most senior senior leadership so this is often your non-profit's
executive director or board chair and sometimes you can even have both so a letter from both your
executive director and your board chair second you always want to include your non-profits mission
statement and vision statement even if you're going to be sending this report to people that
you're fairly confident know your organization well it's always a good idea to reinforce that
mission statement by putting it on all of your materials whenever you get a chance third you're
going to want to include your organization's current strategic goals what are some of the
things that you're trying to accomplish in the future where are you going as an organization
this is something that you can include to inspire people to think about how they could support your
future goals while they're reading about your past accomplishments knowing where you're going will
create a sense of confidence that you know what you're doing as an organization and that you are
working towards meaningfully addressing the social or community issue that your nonprofit was formed
to address and pairing that with your explanation of what you accomplished in the past year
just bolsters your credibility and on that note the next thing you want to include is
what you accomplished in the past year you want to talk about all of the good that you accomplished
in the past fiscal year and you want to do this not only by sharing the numbers so how many people
you served or helped or meals packaged or whatever your mission may be animals rescued for example
you want to include those numbers but you also want to do some storytelling around these numbers
people connect emotionally more to stories of an individual or one community that you
served as a non-profit so you want to balance including both the data and the personalized
storytelling to make it a compelling annual report i recommend once again if you're going to
use a lot of numbers presenting them in at least a visually appealing way like through an infographic
including high quality photos is a must and as i said before at least one but perhaps even a
handful of impact stories showcasing specific individuals or animals or communities or
depending on your mission people that were served by your organization over the past year
fifth you want to include your organization's annual financial statement this is a breakdown
of your organization's revenue and expenses on a high level on the revenue side you'll
see a lot of non-profits sharing the general sources of the funds in categorical terms so
number of donations or amount of money that came from grants amount of money that came from
um sponsorships amount of money that came from individual donors or the government et cetera
so just those larger buckets is how a lot of organizations will break down their revenue
nothing beats a good pie chart for this it just really helps simplify this information and make it
visually appealing again and on the expenses side a high level overview of how the money was spent
you can break it down by your main programs your administrative expenses etc. talking about money
and your financial status as an organization can be awkward and perhaps even feel a little
uncomfortable but just remember your donors are looking to you to be transparent about how you're
spending the resources that they have trusted you with so it's always important to do that
and there are ways of showcasing this as something that is really critical to achieving your mission
which is what it's all about i really like how charity water did this in their 2018 annual report
they didn't just break down their finances but they framed the conversation around their finances
by just reinforcing that the money that they raised was money that translated into impact
i'll leave the link to their report in the description below if you want to kind of check
it out and see how they did that but i thought it was really smart and a really impactful way
of reminding donors and supporters that this isn't just money that they give that goes into an abyss
this is this is an investment that they are making in tackling an important issue that helps people
the sixth and final major thing that you want to make sure you include in your annual report is a
thank you for your major contributors and here's the caveat for that you want to only do that if
you have their permission to share their name many annual reports will list the organization's top
funders whether that is a grant foundation or a corporate sponsor or an individual
donor but it's really important especially with individual donors that you make sure
if you're not sure that you have their permission to put their name in the report some donors i know
are very you know discreet they prefer to stay anonymous and don't really like public recognition
so it's important for them to not be named so just be very thoughtful and courteous about how you
approach listing your donors but it is a good idea to list those who have the permission to do so
because that sort of adds a level of credibility to your organization it says to the public look
at all these amazing supporters we have don't you want to be one of them
um and it just it adds a level of uh officialness if that's i don't think that's actually a word it
adds a level of officialness to your organization and its fundraising efforts those are the six
components you want to be sure to include like i said it's a little flexible so you could think of
interesting additional things that you might want to include but just a couple of additional tips
here to wrap up in my opinion you should avoid being too cold with your language that you're
using in your annual report i think it's much better to use inviting warm personal perhaps even
depending on your organization's brand informal language remember people who read your report
are human beings and they want to see the human being on the other side of the report too so in my
opinion it's a good idea to stay away from overly stuffy or corporate language in these reports
just reinforcing one more time to make your report visually appealing nobody wants to read
10 pages of dense text so use you know lots of color use your your organization's brand colors
use design elements use photos try to make it visually interesting wherever you can and i said
this before also but just one more time try to get creative think about ways you might make your
report stand out could you make it interactive could you include a video what's going to work for
you that's really going to capture the attention of your supporters and make your report memorable
i mentioned a couple of other annual reports and resources throughout this video and like i
said i'll be sure to leave the links to those in the description below if you want to check them
out for more inspiration okay i would love to hear from you at this point are you creating your first
or second or third annual report this year i'd love to hear your questions or ideas in
the comments i'm sure the rest of our community of change makers would love to see those too
if you have a lot of experience grading anal reports definitely include your tips below too
as i mentioned before if you are looking for some additional training and help on starting
a non-profit or developing a sustainable fundraising plan check out the trainings
on my website FounderToFullTime.com. I also have a group on Facebook called Change the World or Bust,
where we have like a couple thousand people from all around the world, it's awesome,
who are all interested in making a difference in their own unique ways. And i invite you to
come join our community there. Finally if you're looking for some just additional resources or
sometimes even funding leads and articles on social impact trends I have a super cool
newsletter you can subscribe to that using the link that I'll leave in the description
below as well and of course opt out anytime you'd like. Thank you as always for watching
once again I'm Amber Melanie Smith and I hope to see you next time, bye!
you