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Creating Effective Annual Reports After an Insanely Chaotic Year

It’s the beginning of a new year, and normally that means you’re coming back to the office to put the final touches on your donor annual report before sending it out.

But 2020 wasn’t a year that anyone expected. For many nonprofits, 2020 was like a car spinning out of control on the ice.

So you might be reading this without any plans of publishing an annual report.

If you’re not planning to publish an annual report this month, maybe at the end of this blog post I can get you to reconsider.

I highly recommend you send your donors some kind of summary of the past year… with all its insane ups and downs.

For some nonprofits, 2020 sailed along without much interruption.

But for so many others, 2020 was a punch to the stomach.

No matter where your feelings land as you consider 2020’s impact, here’s how you can publish a reassuring, inspiring annual report after an insanely chaotic year.

1. Don’t think of the annual report as an appeal.

Annual reports take time and money to produce. Some years, you just wonder if they’re worth the investment.

But even if you don’t see an avalanche of generosity pouring in, annual reports are incredibly helpful donor cultivation pieces that contribute to the success of your overall fundraising strategy.

“Annual reports can help you demonstrate your accomplishments to current and future donors, cultivate new partnerships, and recognize important people. Major funders and other supporters will often expect you to produce an annual report, and some charity watchdog groups require annual reports in order for you to receive a positive rating.”
– Kivi Leroux Miller (From her eBook, How to Create a Nonprofit Annual Report)

Essentially, the marketing and fundraising goal of an annual report is to “demonstrate your accomplishments.”

This in turn helps you raise more donors throughout the rest of the year. It’s important to realize that the report itself isn’t supposed to be an appeal.

If you are communicating your accomplishments as an organization, you’re hitting your goal for this important communication piece, whether or not any new gifts come into your organization.

If 2020 was a “bad” year for you, demonstrating your accomplishments (no matter the size) is still a huge win for you!

During a year-long pandemic, if you can show even the smallest victories in your annual report, you’re already showing tremendous staying power that boosts your credibility with donors.

Honestly, the simple fact that you’re still in the game is testimony to the fact that your nonprofit deserves consideration.

“The damage to nonprofits has been unimaginable—they have already lost 1 million jobs—and it only projects to get worse. Every type of organization has been hurt.”
– Rick Cohen, COO National Council of Nonprofits [cited in robbreport.com]

If nothing else, this past year showed that your nonprofit can still get things done for the mission even when times are tough.

And that is amazing.

2. Publish digitally.

When considering to send a donor’s annual report, one of the primary considerations is how you’re going to send it.

Will you send a hard copy or digital or both?

At this point in time when everyone is still living under the restriction of the COVID-19 crisis, you can save money by publishing your annual report digitally as a PDF download and only send hard copies to your highest giving donors.

By crafting a series of email campaigns announcing your annual report, and what donors can get out of it by reading it (inspiration, encouragement, confidence in their giving), you can drive traffic to your website and increase the number of downloads.

Also, you may want to consider a way that you can recycle your annual report content so that you get the most bang for your buck.

One way to do this is turning your annual report into a series of blog posts or web pages on your site.

3. Show how your activities resulted in accomplishments.

Most annual reports focus on all the activity that happened over the past year.

For example, “We handed out this many sandwiches, this many socks, this many blankets over the past year.”

While this certainly shows that you are busy, it doesn’t prove to your readers that you are worthy of charitable investment.

In an annual report, not only do donors want to feel appreciated for their gift, they want to see if their gifts are making progress.

In your annual report, show how your activities are producing results towards the ultimate goal, which is the mission of your organization.

If you’ve passed out 10,000 pairs of socks this year, how does that connect to your mission statement?

It might be obvious, but take time to spell out how your activities are accomplishing your mission.

Make sure your donors don’t miss the real results of all your work.

Something like…

“Your generous support made it possible to give away 10,000 pairs of socks and winter gear this year, which means over 500 homeless veterans have what they need to get through the winter.”

Turning activity into results is really about how you communicate what you’ve done.

Simply connect all that you’ve been doing to your mission.

When you show your donors how your activities are making progress towards your mission, you’ll show them that you’re a nonprofit worth investing in.

4. Tell stories.

Storytelling is a critical part of fundraising.

That’s easy to see when you’re writing a direct mail appeal or email campaign.

But is it the same for annual reports?

I mean, “report” is in the name, and aren’t reports dry, scientific analysis?

Not at all! Stories are just as important here as they are in all of your communications.

In fact, according to New York Times bestseller and marketing coach Donald Miller

“Story is the greatest weapon we have to combat noise, because it organizes information in such a way that people are compelled to listen.”

That means that stories will help your annual report cut through the noise of everything else going on in the world of your donor as they read.

Storytelling in your annual report is basically showing the donor what happened rather than telling them.

You don’t have to leave out data to do this. Stories make the data relevant.

For example, after stating the fact that you gave away 10,000 pairs of socks, a story of how donors helped a Vietnam veteran stay warm and dry as he finds the help he needs will make it real to donors.

Show them the names, faces, and places that their giving has affected.

Storytelling will make sure your annual report doesn’t get tossed in the trash with all the other reports from other charities.

5. Bring out your value proposition in each story.

A value proposition is your concise, solid argument for why someone should give to you rather than to another organization.

In professional terms—this is a mini case for support.

And even though you’re not really asking for new gifts in your annual report, you certainly want the piece to show reasons why you’re worth supporting.

Inserting your value proposition statements, slogans, and phrases around the stories you tell can highlight just how unique your nonprofit is.

Think of it this way. There are approximately 1.56 million nonprofit organizations in the United States alone.

Chances are, there are a lot of nonprofits out there doing what you do.

So when you show donors a picture, or tell them a story, it probably will look like what every other nonprofit in your space does.

How do you differentiate your nonprofit brand?

By inserting clear value proposition statements throughout your annual report.

Of course, what makes a good value proposition is enough material for a whole other blog post.

But let’s just say here that there are many ways you can differentiate your nonprofit from the rest of the pack.

You may be different from all the others because of…

  • What you believe
    (Examples: “Because no living creature deserves to be abandoned.” Or “All human beings are free and equal.”)
  • How you do what you do
    (Example: Our unique support strategy gets people off drugs, out of debt, or off the streets.)
  • Where you are located
    (Example: Located in the heart of downtown, we can reach so many people.)
  • How long you’ve been around
    (Example: With over 40 years helping veterans get the help they deserve…)

Look, I know that your nonprofit is unique and deserves to be supported. And I hope you know that too!

In your annual report, make sure your donor can clearly see it too.

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