Mastering Your Annual Impact Report

Mastering Your AnnualImpact Report

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The year is coming to an end. You have received donations, delivered effective programs, and positively impacted your community. Now it’s time to look back, reflect, and report back to your stakeholders (donors, corporate partners, volunteers) in the form of an annual report.

A good number of nonprofit leaders recognize the profound value of annual reports to retain existing supporters and inspire potential new donors and volunteers. It’s also an excellent opportunity to gather your team and reflect on what is working and what are some areas of improvement.

To help you get started, we’ve created this complete guide to help you along the way and provide you with some best practices and mistakes to avoid.

WhatisanAnnualImpactReport,and why should you publish one?

An annual impact report is an in depth and comprehensive document that nonprofit organizations assemble and share with stakeholders every year. Nonprofits use them to demonstrate accomplishments, inspire current and future donors around the organization's mission, build trust and show appreciation to supporters.

The complete financial statement required in some countries can be part of this report.

Annual reports are effectivetools for:

Validating the effectiveness and impact of your programs

Engaging your audience and inspiring new and existing supporters to support your organization

Demonstrating appreciation to your donors and highlighting special partnerships

Must-haves in your annual impactreport

Anintroductorymessagefrom thePresidentorCEO

A message from those leading the organization gives the whole report a more personal touch and it’s important for those leading the nonprofit to report and reflect on the years’ accomplishments, challenges, and overall condition. It could also address: Changes the organization is envisioning to make in the future based on current results, studies, or feedback. Causes of any setbacks during the past year. Reference to current events and news relevant to the mission of the organization to highlight why it exists and needs to continue its work.

Best practice: Adding messages frombeneficiaries

In their 2020 annual report, Save the children added a second intro: a message from a child. Achol, a child's rights activist from South Sudan, describes how she campaigns for a safer future for children, especially girls in South Sudan, casting light on the challenges and dangers they face and calling on world leaders to prioritize children's rights. An excellent way of giving voice to children themselves and create a greater sense of urgency.

2.Your organization’s mission

Taking the time to add your mission will refresh the memory of current supporters about why your organization exists and what you are looking to accomplish together and potential new supporters will learn what your organization is about.

The NSPCC, for example, starts its report with a summary of its organization's mission supported by icons to make it more visually attractive:

3. Youraccomplishments

This is the most important part of your report. Provide your readers with the number of beneficiaries you helped and the campaigns you rolled out and/or maintained to show the impact of your nonprofit over the past year. Add individual stories so readers will understand the value of your work on an emotional level.

Save the Children shared the total numbers of children attended and projects run, and also dedicates two pages to the story of a 7 year old girl in Beirut benefitting from the spaces the organization created for playing and enjoying a safe childhood.

3. Best practice: Presenting achievementsvs. targets

Allow your audience a look inside the organization's strategy and be transparent about your performance against the set targets of the past year. Celebrate achieving or even surpassing them, or explain the challenges you faced that led you to miss your targets. Remember, transparency builds trust.

4. Financial statement

It is important to share your financial information in a way that makes sense to your audience and is easily understandable. To go the extra mile, use graphics and a short description to explain how the funds were raised and invested.

Your financial statement should include:

Where your funding came from (e.g., individual donors, corporate partnerships, grants, etc. )

Where you allocated your funds over the course of the year: campaigns, constituents served, overhead, direct programs, etc.

5. A list of donors, partners, and other champions

Besides sharing your accomplishments, your annual report is also about genuinely thanking your supporters. Describe their contribution to inspire new supporters to get involved, too!

This is also valuable information to corporates considering a partnership with your organization:

Watch our interview with Luciana Bonifacio from Save the Children to get more tips on corporate partnerships and annual impact reports.

6. Board members and keystaff

Put faces to your organization by listing the names of your board members and key staff!

Depending on the size of your nonprofit and the space available in your report, consider even including a few short staff bios or profiles to add even more of a human touch and showcase the talent working in your organization.

Best practice: Highlighting noteworthy engagementby individuals and groups

The NSPCC describes where they received their funds and support, putting special focus on standout campaigns and engaged volunteers.

Thanking the commitment of individuals and groups also shows potential new supporters concrete examples of how to get involved.

7.Acalltoaction

Even if your main goal is not to acquire new supporters with this report right at this moment, keep in mind that you will use your annual reports to do so in the future. So don't leave your readers hanging. Give them something to do, somewhere to go next.

Lead them to your website to learn more about a particular program, to sign up for donations or as volunteers, or simply invite them to follow you on social media.

Watch our interview with Kirsty Lawson about successful corporate partnerships and how to engage partners with your annual impact report.

Bestpractices to make your report stand out

Approach: Know your audience and givethemwhattheywant

Your target audience should be your current and potential supporters.

Focus on your accomplishments, not activities or administrative details.

Ensure there is a sense of appreciation throughout the report.

Provide donors with hope for the future and get them excited about joining the world you are creating. Don't overload the report with statistics your general audience might not read.

Save the Children adds a summary of their financial report and a link to the full one, knowing that not everyone will be interested in the complete financial statemen

Anintroductorymessagefrom the PresidentorCEO

Share real stories that are easy to empathize with.

Don’t use jargon, acronyms, and technical language that might be unfamiliar to your audience. Be honest and acknowledge both the highlights and the lows. Make sure it inspires trust. Share your plans and projects to will motivate your audience to stay or get engaged.

Let different voices speak in the report. Save the Children shares real stories of struggle and hope to inspire supporters. And the NSPCC includes a thank you letter the organization received from students and a testimonial from a volunteer in their 2020 report.

Design: Make it easy to read and hardto put down

Break your texts down into easily digestible short paragraphs and text boxes.

Use different formats and media throughout the report

In Save the children's interactive digital report, you can even hear audio messages from youth activists. An excellent way of giving more life to their report and raising the voices of the organization's champions and beneficiaries.

Production:Designateateamforcreating anddistributingthereport

Define roles and responsibilities. You need to decide: budget, format, design, writer, distribution plan, etc.

Ask people not involved in the production of the report to review it and give you feedback about the design and content of the report. Choose well when to publish the report. When you share the report is up to you. Consider aligning the publication with annual events for your organization, like annual stakeholder meetings. Watch our interview with Sophie Seymour who is in charge of the annual impact reports at NSPCC about her process and insights.

We hope thisguide helps you get started and createengaging annualimpactreports!

For more guides and insights on boosting your nonprofit's impact, check our Alaya by Benevity Blog!

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Benevity, a certified B Corporation, is a leader in global corporate purpose software, providing the only integrated suite of community investment and employee, customer and nonprofit engagement solutions. A finalist in Fast Company’s 2020 World Changing Ideas Awards, Benevity’s cloud solutions power purpose for many iconic brands in ways that better attract, retain and engage today’s diverse workforce, embed social action into their customer experiences and positively impact their communities. With software that is available in 22 languages, Benevity has processed nearly $8 billion in donations and 43 million hours of volunteering time to support 326,000 nonprofits worldwide. The company’s solutions also facilitated 530,000 positive actions and awarded 1.2 million grants worth $12 billion. For more information, visit benevity.com.