Your Annual Report

Does your organization issue an annual report?  Or an impact report?

As a tax-exempt organization, you must make certain documents available for public inspection, including your application for exemption, your IRS determination letter, and your annual Form 990 for the past three years.  Although there is no requirement to disclose items beyond these, some nonprofits choose to make their annual financial statements, governing documents, and other information available to the public.  The IRS believes that an organization that is more transparent is better governed and more likely to follow requirements.  One way to improve transparency is through your annual report.

An annual report is used to share accomplishments for the year and show the impact that the organization is making.  It provides a connection to your community.  Your annual report is going to have a broad audience.  Board members, donors, volunteers, partner organizations, potential donors, and the general community will likely have access to your report.  In order for your report to be effective, make sure it is concise and easy to read. 

Components of An Annual Report

If you have not issued an annual report in the past or are looking to change up your current report, here are some suggested areas to include.

Mission

• Clearly state your mission first.  This is why your organization exists.  The content of the annual report should demonstrate how you are pursuing your mission.  

Impact

• Share statistics
• Include goals from the past year and the progress made on accomplishing them.

Your Work

• Describe your programs, what does your organization do and why is it important?
• Include information on various locations served

Stories

• Use photos.  The best way to showcase your programming and accomplishments is by putting a human face on the cause.
• Include quotes
• Telling a story helps associate emotions to your organization

Financials

• Provide summaries, be brief
• Include easy to read graphs

What’s Ahead

• Goals for the coming year

Thank You

• Thank your donors
• Double check the spelling of your donors’ names
• Be sure to respect any donors that want to remain anonymous and do not include their names

Leadership

• Thank your board members for their service
• Include your team members
• Provide a message from leadership, normally the Executive Director and/or Board President

Call to Action

• Provide an opportunity for people to volunteer
• Include information on how to donate to your organization

Your annual report can be seen as a fundraising piece to show why your organization’s cause is worthy of support; however, it can also build accountability and trust with your audience.   

Contributed by: Carrie Minnich, CPA, MAcct | Director | DWD CPAs & Advisors