The Secret to a High Impact Annual Report
There are only four things people look at in a nonprofit’s annual report. Focus on what people actually read.
Article Highlights:
Think about the annual report is as a brochure in disguise.
We nonprofits often put a great deal of time and effort into our annual reports, especially compared with how briefly most recipients will look at them.
“The annual report is a comic book,” a nonprofit executive once told me. “They look at the pictures and glance at the words.” The secret reality is that people do only four things with a nonprofit annual report. They:
- Read The Letter (typically from the executive director and the board chair)
- Check to see if they’re listed (if they are a donor)
- Read the captions on photos
- Look at the financials to see how big you are and if you had a surplus or a deficit.
You know it’s true! Yet (with the exception of The Letter) these are the areas that are often done at the last minute and without real thought.
So this year, rather than slave and anguish over the parts almost no one will read anyway, try a new approach:
First Question
Old: Which of our activities do we want to highlight?
New: What are the 2 – 5 accomplishments people would be surprised to hear that we did?
Picture Selection
Old: What pictures do we have? Who should we put in it (examples: volunteers, board members)?
New: What would be 2 – 4 great captions? What photos can we take or get that would be relevant to those captions?
Distribution
Old: Let’s send it to board members, funders, volunteers.
New: Let’s send it to everyone who is mentioned in the annual report plus nonprofits that we work with. Plus the moms of everyone on staff.
Budget Allocation
Old: By doing a 4-page annual report that we photocopy double-sided and staple, we show how frugal we are with your money (poverty mentality).
New: By having an 8-page attractive but modest annual report, we look and feel like the kind of organization you feel comfortable giving money to (upbeat, confident mentality).
The Letter
Old: “Polite and warm” is the way to go, but sound official.
New: Get personal. Don’t hold back. Share something intimate and meaningful in the letter that can give an insight into your work and/or your year. Tell the reader something that makes him or her feel like an insider.
Staff Photo
Old: Show how friendly we look / how diverse we are / how young we are / how big we are (etc.).
New: Include close-ups of individuals at various levels and at different jobs, with captions that say something about the person and accomplishments. Example: “Marisa takes the blood pressure of a young Nicaraguan immigrant — Spanish is just one of the 11 languages we have on staff.”
Final secrets:
Put your annual report up on your website and spread out a hardcopy on the walls of your lobby. Have a 10 minute discussion about it at the board meeting. One way to think about the annual report is as a brochure disguised as an annual report: who should this particular brochure go to, and what responses are we trying to evoke from them?
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- Five Years and Growing: How One Nonprofit Built a Sustainable, Collaborative Mission
- Measure What You Value: Designing a Values-based Performance Appraisal System
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About the Author
Jan is a former editor of Blue Avocado, former executive director of CompassPoint Nonprofit Services, and has sat in on dozens of budget discussions as a board member of several nonprofits. With Jeanne Bell and Steve Zimmerman, she co-authored Nonprofit Sustainability: Making Strategic Decisions for Financial Viability, which looks at nonprofit business models.
Articles on Blue Avocado do not provide legal representation or legal advice and should not be used as a substitute for advice or legal counsel. Blue Avocado provides space for the nonprofit sector to express new ideas. The opinions and views expressed in this article are solely those of the authors. They do not purport to reflect or imply the opinions or views of Blue Avocado, its publisher, or affiliated organizations. Blue Avocado, its publisher, and affiliated organizations are not liable for website visitors’ use of the content on Blue Avocado nor for visitors’ decisions about using the Blue Avocado website.
I have been nervous about creating our agencies first annual report. This article gave me some great ideas.
As an addition to the formal report, I like to collect all the event posters and news clippings from my organization each year and bind them into a booklet. People enjoy looking through it at the AGM, It brings back forgotten moments just like a family photo album.
Then, when tabling at events or volunteer faires, a stack of booklets shows potential volunteers the kinds of events and impact your organization has.
Stacy, Victoria, BC, Canada
As an addition to the formal report, I like to collect all the event posters and news clippings from my organization each year and bind them into a booklet. People enjoy looking through it at the AGM, It brings back forgotten moments just like a family photo album.
Then, when tabling at events or volunteer faires, a stack of booklets shows potential volunteers the kinds of events and impact your organization has.
Stacy, Victoria, BC, Canada
I am just about to start on our annual report. We’re celebrating 210 years of service and last year, we did an old photo album, which garnered rave reviews. This year we’re doing a CD calendar so people might possibly keep it around for an entire year.
I love the idea of sending it to the moms of everyone on staff – maybe we’ll send it to moms of board members too! This will help explain what we do, which is often hard to explain.
So very many great ideas, thanks!
Nora, Novato, CA
Your own last Annual Report, the long fold-out reproduction of a mosaic, with smaller bits of the mosaic echoing inside, is outstandingly beautiful and eye-catching, which led me to read it. Imagine!
I have one quibble, which applies to almost all annual reports and other printed materials: The name of the designer/design firm is teeny tiny at the bottom of the last panel.
Not fair! Not cricket! Not right! I know, I know, it’s a long-standing tradition. But hey! Aren’t we out here to change things? Let’s put our designers’ names loud and clear where they can get credit for their work.
Susan Klee, Berkeley CA
P.S. I am not a graphic designer . . .
Thanks, Susan, although you are referring to CompassPoint’s Annual Report. Blue Avocado, of which CompassPoint is a key sponsor, hasn’t been around a year yet so we have an excuse for not having an annual report yet. And I’ll pass along your comment to the amazing Patrick Santana and Paulette Traverso, the graphic designers behind both CompassPoint’s annual reports and the Bue Avocado’s look!
Do you have an electronic copy of the report for me to look at? I would love to see it.
Kranky
Your own last Annual Report, the long fold-out reproduction of a mosaic, with smaller bits of the mosaic echoing inside, is outstandingly beautiful and eye-catching, which led me to read it. Imagine!
I have one quibble, which applies to almost all annual reports and other printed materials: The name of the designer/design firm is teeny tiny at the bottom of the last panel.
Not fair! Not cricket! Not right! I know, I know, it’s a long-standing tradition. But hey! Aren’t we out here to change things? Let’s put our designers’ names loud and clear where they can get credit for their work.
Susan Klee, Berkeley CA
P.S. I am not a graphic designer . . .
wonderful information that you shared with us. I just love the way that "Get personal" is getting popular among the office.
My first time here and I’m hooked. Kranky or not but this is real help and I am glad to admit it. I have to see the masic report. My mind is racing with ideas. Wow, what a “turn on!”
Hello Jan,
I had a couple of questions after reading "The Secret to a High Impact Annual
Report." We are in the midst of preparing our annual report, however we are
wondering if the content of the report should pertain ONLY to our last FY
(May 1-Apr 30) OR if we can include elements from the current fiscal year to
date? If we were to include elements from the current fiscal year to date,
would we need to be clear that these elements are from the current fiscal
year? (For example, we would like to mention a board member who donated this
FY as one of the donors on the list of donors).
Thank you for your time, Katie
Katherine, thanks for this messsage. Include whatever you want to in your annual report. An annual report is more like a "Report to the Community" than a legally defined document such as Form 990.
You can add a few phrases such as "In this new fiscal year we have already . . . " but especially with fiscal years that do NOT end on December 31, remember that most of your audience is pretty fuzzy about when your year ended and other started. And even if they have that firmly fixed in their minds, what's really important to them is that you've done "recently," and they would certainly want to hear about something important that happened since the end of the fiscal year. Don't falsify anything — such as putting in 14 months of client statistics — but don't leave out anything important.
Remember, too, that donor lists are not legally regulated. If someone donated within a month of the fiscal year end I would probably include their name (but not their dollar amount in the financial report) in both lists. As for board lists, if someone has joined the board between the end of the fiscal year and before the annual report is mailed, you can put his or her name with a parenthetical "(started June 2011)" or something like that. Hope this is helpful! Thanks for asking, Jan