Creating an Annual Donor Report

We are a month into 2009 and 2008 already seems like ancient history. Most nonprofit executives are focused on the new programs they will be implementing this year and meeting the challenge of raising funds in this weak economy.

But before totally putting 2008 to rest, take a moment to reflect on what your organization has accomplished in the past year and how you can communicate that to your donors through an annual report.

Here are seven guidelines to developing a compelling donor report:

1. Decide on the format. An annual report doesn’t have to be an expensive, glossy publication. It can be a short, two-color newsletter or even a letter from the president.
2. Report on accomplishments, not just activities. An annual report reminds donors of why they made an investment in your organization in the first place and how that investment is paying off. While the fact that you gave 50 radio interviews may be impressive, it is more important to explain how this media exposure advanced your mission.
3. Keep it donor-centered. This is another opportunity to thank donors for their contributions. Many nonprofits use their annual reports to recognize donors by listing their names. Of course, make sure you have cleared this with donors first as some may prefer to remain anonymous.
4. Make it personal. Ask some of your key constituents to provide quotes or write short summaries about how your organization has benefited them. These real life examples will help donors relate to your mission and work.
5. Add photos if possible. A picture speaks a thousand words so try to incorporate photos of your organization in action or photos of top donors or board members. Don’t forget to include captions beneath the photos.
6. Include financials. The Standards for Charitable Accountability published by the Better Business Bureau Giving Wise Alliance (www.us.bbb.org) recommend that annual reports include the following financial information: (i) total income in the past fiscal year, (ii) expenses in the same program, fund raising and administrative categories as in the financial statements, and (iii) ending net assets. Regardless of what financial information you include, be sure to prepare a paragraph or two explaining your financial situation in plain English.
7. Plan for 2010. It’s a lot easier to pull together a report if the data is compiled in advance. Begin working with others in your organization to create a repository for accomplishments and activities. This may be as simple as a shared file on the network to which staff can add information on publications, media hits, events, and examples of impact.

Once the report is prepared, you’ll probably be surprised about how much you have accomplished in one year. Be sure to share the report with everyone in your organization and take a moment to appreciate the entire team’s contribution to achieving your mission.