In this article, we break down the most important dos and don\u2019ts of creating a nonprofit annual report that informs and inspires.<\/p>\n
What a nonprofit annual report is (and isn\u2019t)<\/h2>\n
First, it\u2019s important to understand what a nonprofit annual report is<\/em>.<\/p>\n The annual report summarizes your nonprofit organization\u2019s impact and achievements over the course of a fiscal year. Unlike the federal return that you may be legally obligated to file every year\u2014e.g., the Internal Revenue Service\u2019s Form 990<\/a> or Canada Revenue Agency\u2019s T3010<\/a>\u2014your annual report is a public-facing, voluntary<\/em> disclosure of your organization\u2019s activities and financial health.<\/p>\n Because it\u2019s public-facing, the annual report serves multiple purposes for a variety of stakeholders. For one thing, it promotes financial transparency<\/a>\u2014critical not only for maintaining the trust of your current supporters, but for earning the trust of prospective donors who are curious about your mission.<\/p>\n For those prospective donors and other members of the public, your nonprofit annual report may be their first introduction to your organization. This means that the report should provide a clear statement of the mission, vision, and values that guide your work in the communities you serve.<\/p>\n For the board members, donors, and volunteers who make that work possible, the report is first and foremost an opportunity to acknowledge and show thanks<\/a>, with impact stories demonstrating the real difference their support has made possible and can continue to make moving forward.<\/p>\n Put simply, a well-designed nonprofit annual report is a multipurpose tool that can strengthen your organization\u2019s stewardship, cultivation, and marketing strategy year-round.<\/p>\n<\/div>\n As you set out to write and design your annual report, keep in mind that it should:<\/strong><\/p>\n Now that you have a clear idea of what the nonprofit annual report is\u2014and what it does\u2014let\u2019s walk through some important dos (and don\u2019ts) to guide your own reporting.<\/p>\n<\/div>\n An annual report is more meaningful when it\u2019s shaped by a clear fundraising strategy<\/a>. When you\u2019ve already laid the important groundwork of intentional nonprofit strategic planning, you have the tools to write an annual report that reflects mission-aligned strategy and that provides tangible results of your organizational goals and priorities. It\u2019s one thing to say, Look what we\u2019ve accomplished this year. It\u2019s even more powerful to say, Our priority this year was to accomplish X goal, we pursued Y fundraising strategy to achieve it, and we\u2019ve seen Z successful outcome as a result.<\/em><\/p>\n Before you draft your report, ask yourself:<\/strong><\/p>\n Your nonprofit annual report begins with clear goals and a cohesive fundraising plan.<\/strong><\/p>\n Download Data-Informed Planning for Fundraising Success<\/a><\/strong> and get expert guidance for creating a nonprofit strategic plan that is actionable and mission-aligned.<\/p>\n<\/div>\n When your annual report aligns with your nonprofit strategic plan, it tells a cohesive story of intention, progress, and impact.<\/p>\n Don\u2019t:<\/strong> Approach your nonprofit annual report as a one-off marketing task or something that can be thrown together at the last minute. Without a clear strategic direction, reports lack focus and mean much less to the people reading them.<\/p>\n<\/div>\n Your mission and the communities you serve are at the heart of your nonprofit organization\u2014so they should be central to your nonprofit annual report, too.<\/p>\n Particularly for those readers who might be new to your nonprofit, establishing your mission and vision at the outset will provide a clear frame for the outcomes you\u2019ve achieved and the impact they\u2019ve had. And when you tie specific activities or achievements back to your guiding mission, the annual report becomes an expression of your ongoing commitment to alignment and accountability.<\/p>\n Don\u2019t:<\/strong> Simply list all of your activities and assume readers will understand their relationship to your mission and impact on your communities. Clearly explain what each outcome has contributed to your nonprofit\u2019s long-term vision and growth.<\/p>\n<\/div>\n The data you include in your nonprofit annual report is only as compelling as the story you tell<\/a> with it. Rather than tabulate every program update or statistic, the annual report should highlight key metrics and milestones that shape a meaningful narrative of the year. Your readers don\u2019t want to know every detail of the work you\u2019ve done; they want to know why it matters.<\/p>\n Consider these storytelling tips:<\/strong><\/p>\n Don\u2019t:<\/strong> Treat your annual report like a data dump. Providing too much information will overwhelm your readers and distract from your meaning, message, and mission.<\/p>\n<\/div>\n Because the annual report is essentially a summary of your organization\u2019s activities and impact, it can be easy to frame things in terms of what you did. But the story you\u2019re telling is just as much about thanking your donors for what they have made possible.<\/p>\n Upgrade your storytelling with the power of video.<\/strong><\/p>\n What if your donors could see, feel, and hear the impact of their generosity? DP Video<\/strong> integrates directly with DonorPerfect, making it easy to thank supporters and illustrate impact with a personal touch.<\/p>\n Learn more about DP Video >><\/a><\/p>\n<\/div>\n Donor-centric storytelling allows your supporters to see and feel the impact<\/a> they have as partners in your mission. It also makes them feel appreciated, which ultimately helps to build trust and deepen your most important relationships.<\/p>\n As you write your nonprofit annual report, be sure to highlight:<\/strong><\/p>\n When you shift the focus from what your organization achieved to what you and your supporters achieved together, you emphasize the shared values and commitment that keep your mission moving forward.<\/p>\n Don\u2019t:<\/strong> Make it all about the organization. Instead, focus on how the commitment and support of your donors shaped successful outcomes and meaningful impact.<\/p>\n<\/div>\n Being open about your nonprofit organization\u2019s operations and financial health is essential to sustaining a culture of accountability and maintaining donor trust. As with your data, however, it\u2019s important to present your financials in the right way.<\/p>\n The nonprofit annual report is not the place to include full financial statements or federal compliance forms, which may be too complex for readers to understand\u2014or too dry for them to care about. Instead, focus on presenting key figures with explanation and context.<\/p>\n Your nonprofit annual report should include:<\/strong><\/p>\n The financial health of your nonprofit organization relies on fundraising and accounting systems that work in tandem. Learn how an integrated accounting solution can improve operational efficiency and grow your fundraising in this blog: Fundraising and Finance: A Guide to Nonprofit Accounting Software<\/a>.<\/p>\n<\/div>\n Don\u2019t:<\/strong> Include detailed financial reports or federal forms like the Form 990 or T3010. Save those for the appendix, or include a link where readers can view them online.<\/p>\n<\/div>\n While the nonprofit annual report is primarily a retrospective document, it should also give your readers an idea of what\u2019s next. Where are you headed now, and how will you build on the activities and achievements of the past year to get there?<\/p>\n Include future-focused sections that show donors:<\/strong><\/p>\n Data insights for a clear path forward<\/strong><\/p>\n DonorPerfect\u2019s at-a-glance donor insights, automated reports, and custom dashboards help you prioritize the right donors and stay on track with your fundraising goals.<\/p>\n Request a demo of DonorPerfect >><\/a><\/p>\n<\/div>\n Remember, each annual report reflects just one piece of your nonprofit organization\u2019s larger, sustained vision. When you ground the report in intentional nonprofit strategic planning, your donors better understand their part in an ongoing mission and feel inspired to stay involved.<\/p>\n Don\u2019t:<\/strong> Only focus on what happened. Devote attention to where you plan to go next and how your donors can help you get there.<\/p>\n<\/div>\n Because the annual report is a public-facing and multipurpose document, it should be visually appealing, easy to read, and accessible. If you present readers with one long wall of text, they\u2019re likely to lose interest. Instead, get creative with design and consider non-traditional formats that might be more engaging.<\/p>\n Follow these design best practices<\/a>:<\/strong><\/p>\n Additionally, be strategic about how and where you distribute your report. When used effectively, the annual report isn\u2019t just something you publish and forget, but a fundraising tool that informs and engages stakeholders year-round.<\/p>\n Promote your nonprofit annual report by:<\/strong><\/p>\n The look and feel of your nonprofit annual report can distract from the story you\u2019re trying to tell. But when you\u2019re intentional about design and distribution, the report can strengthen your overall fundraising strategy and inspire audiences to engage more deeply with your mission.<\/p>\n Don\u2019t:<\/strong> Treat the design and distribution of your annual report as an afterthought. A visually compelling report can be used not only to inform and inspire donors, but to connect your mission to a wider audience.<\/p>\n The key to writing an effective nonprofit annual report is starting with a clear, data-informed fundraising plan and clean systems to support it. Download How to Use Data to Manage Your Nonprofit<\/a> and get practical tips for tracking financial performance, automating workflows, and visualizing impact in your nonprofit CRM.<\/p>\n<\/div>\nThe purposes of a nonprofit annual report<\/h2>\n
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The dos and don\u2019ts<\/h3>\n
Do: Start with a nonprofit strategic plan<\/h2>\n
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![\"A](\"https:\/\/uploads.donorperfect.com\/images\/sites\/2\/data-to-manage-blog.jpg\")
<\/figure>\n<\/div>\n<\/div>\n<\/div>\nDo: Lead with mission, impact, and outcomes<\/h2>\n
Do: Tell a clear story with data<\/h2>\n
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Do: Put your supporters front and center<\/h2>\n
![\"Example](\"https:\/\/uploads.donorperfect.com\/images\/sites\/2\/dpvideo-emily-mockup-small.png\")
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Do: Share financials transparently\u2014and strategically<\/h2>\n
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![\"A](\"https:\/\/uploads.donorperfect.com\/images\/sites\/2\/sage-blog-feature.jpg\")
<\/figure>\n<\/div>\n<\/div>\n<\/div>\nDo: Make it forward-looking<\/h2>\n
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![\"Giving](\"https:\/\/uploads.donorperfect.com\/images\/sites\/2\/givingtuesday-goal-vector-1024x758.png\")
<\/figure>\n<\/div>\n<\/div>\n<\/div>\nDo: Design and distribute for deeper engagement<\/h2>\n
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Download How to Use Data to Manage Your Nonprofit<\/h2>\n