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Nonprofit Annual Report Examples & Best Practices

Learn how to write and produce affordable nonprofit reports for NGOs and charities. Get nonprofit annual report examples and templates that make an impact.

Hadar Peretz

8 minute read

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Short answer

What should a nonprofit annual report include?

Executive Summary
Letter from the Leadership
Mission Statement
Programs and Services
Financial Summary
Donor Acknowledgment
Success Stories
Challenges and Future Plans
Visual Representations
Next steps
Legal and Compliance Information
Appendices (if necessary)

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Reports are the most effective tool by which nonprofits and charities demonstrate value

Not for profit annual reports are the mirrors reflecting the integrity, effectiveness, and impact of an organization.

They are the narratives that tell a story of how a nonprofit is making a difference, the financial stewardship of the organization, and its accountability towards its mission and its donors.

In this guide, we will delve into the core components of nonprofit reports, the main types, their significance, and how to craft them effectively to resonate with stakeholders.

What is a nonprofit annual report?

In this section, we will explore the core components that make up a nonprofit report and why transparency and accountability are paramount in these documents.

Here's an example of DeserTech's annual report:

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What is the purpose of nonprofit reporting?

The purpose of nonprofit or charity reporting is to demonstrate transparency and accountability to stakeholders.

By providing clear, accurate, and comprehensive information, a nonprofit shows its integrity and earns the trust of its donors, beneficiaries, and the community at large.

Why are reports so crucial for nonprofit organizations and charities?

Nonprofit reports are not mere documents but powerful tools that can significantly influence an organization's reputation and support base.

In this section, we will discuss how they contribute to achieving organizational goals and building trust among stakeholders.

1) Building trust among stakeholders

Trust is the cornerstone of any successful nonprofit organization. It's built over time through consistent transparency, accountability, and meaningful engagement with stakeholders.

Open Communication: Establishing a two-way communication channel through which stakeholders can understand and engage with the organization.
Accountability: Demonstrating responsible management of resources entrusted to the organization.
Community Engagement: Fostering a sense of community and shared purpose among stakeholders.
Demonstrating Impact: Showcasing the tangible impact of the organization's work validates its mission and encourages further engagement.
Fulfilling Legal Obligations: Meeting the regulatory requirements for disclosure and reporting is a legal obligation that also enhances credibility.

2) Achieving organizational goals

Nonprofit reports serve as a roadmap, showing where the organization has been and where it is heading. They provide a platform to share successes, learn from challenges, and set the stage for future endeavors.

Performance Evaluation: Assessing the progress towards the set goals and objectives.
Strategic Planning: Utilizing insights from the report for future planning and decision-making.
Donor Engagement: Engaging donors by showcasing the impact of their contributions.

Great examples of nonprofit annual reports

Important types of nonprofit organization reports

Diving into the realm of nonprofit reports, one discovers a variety of report types each serving a unique purpose.

Let’s take a close look at the common types of nonprofit reports including Annual Reports, Financial Statements, Program Outcomes Reports, and Impact Reports.

1) Annual reports

Annual reports are comprehensive overviews of a nonprofit's activities over the preceding year. They are pivotal in communicating the organization's achievements, financial health, and future plans to stakeholders.

Critical components of annual reports:

Narrative of Progress: Detailing the journey of the organization, showcasing the milestones achieved.
Financial Summary: Providing a clear picture of the financial status, including income, expenses, and net assets.
Future Outlook: Offering a glimpse into the organization’s future plans and how it intends to achieve them.

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2) Financial statements

Financial statements are crucial for displaying the financial integrity and health of a nonprofit. They include the statement of financial position, statement of activities, and statement of cash flows.

Critical components of financial statements:

Financial Position: Displaying assets, liabilities, and net assets to depict the organization’s financial standing.
Financial Activities: Detailing the revenue, expenses, and changes in net assets.
Cash Flows: Showcasing the cash inflows and outflows during a particular period.

3) Program outcomes reports

Program outcomes reports focus on the results achieved through various programs run by the nonprofit. They are essential for evaluating the effectiveness and impact of these programs.

Critical components of program outcomes reports:

Program Description: Providing a detailed overview of the program, its objectives, and target beneficiaries.
Outcome Measurement: Evaluating the outcomes against the set objectives to measure the program’s effectiveness.
Lessons Learned: Sharing insights gained and how they will be utilized for future program improvements.

4) Impact reports

Impact reports delve deeper into the tangible and intangible impacts a nonprofit has on the community and the issues it addresses. They are instrumental in showcasing the real difference the organization is making.

Critical components of impact reports:

Impact Assessment: Evaluating and presenting the tangible impacts, like the number of lives improved.
Stories of Change: Sharing real-life stories to humanize the data and create a stronger emotional connection.
Strategic Insights: Offering insights on how the impact aligns with the broader mission and the way forward.

What makes an effective nonprofit report?

An effective nonprofit report goes beyond mere facts and figures; it tells a compelling story, engages the reader, and visually represents the organization's impact.

In this section, we will go into how clarity, engaging storytelling, and visual representations contribute to making a nonprofit report resonate with its audience.

1) Clarity and precision

Clarity in communication is the first step towards creating an effective nonprofit report. It's about presenting information in a straightforward, understandable manner.

Simple Language: Avoid jargon and use simple, clear language to convey the message.
Logical Flow: Ensure a logical flow of information for easy comprehension and retention.

2) Engaging storytelling

Storytelling breathes life into data, making the report engaging and relatable. It's about connecting with the reader on a human level.

Human Impact: Share stories of individuals whose lives have been positively impacted by the organization.
Mission-driven Narrative: Weave a narrative that aligns with the organization’s mission and values.

3) Visual representations

Visual elements in a nonprofit report not only break the monotony of text but also provide a quick, clear way to convey complex information.

Infographics: Use infographics to represent data in a visually appealing and digestible manner.
Photographs: Incorporate images that depict the organization's work and the communities it serves.

How to write a nonprofit annual report?

Crafting a nonprofit report is a meticulous process that requires a blend of factual accuracy, storytelling, and design.

In this section, we will walk through the steps of gathering and organizing information, followed by drafting and revising the report.

How to prepare for writing a nonprofit report?

The foundation of a compelling nonprofit report lies in the accuracy and completeness of the information gathered.

Data Collection: Collect relevant data, stories, and financial information.
Stakeholder Input: Seek input from key stakeholders to ensure a holistic representation.

What to include in a nonprofit report?

A nonprofit or charity report is a crucial document that showcases an organization's activities, financial status and impacts over a specific period, usually a fiscal year.

These elements help in building trust, demonstrating transparency, and engaging stakeholders by providing a comprehensive view of the organization's performance and impact.

Here's what a nonprofit report typically includes:

1. Executive Summary: A brief overview of the organization's mission, goals, and the major achievements for the reporting period.

2. Letter from the Leadership: A letter from the Board Chair or Executive Director expressing gratitude, reflecting on the year’s accomplishments, and looking forward to the future.

3. Mission Statement: A clear articulation of the organization’s mission and vision.

4. Programs and Services: Detailed descriptions of the programs and services offered, including any new initiatives launched.

Impact and Outcomes: Demonstrating the tangible impact of the organization’s work, supported by data, stories, and testimonials.
Community Engagement: Highlighting partnerships, volunteer involvement, and other community engagement activities.

5. Financial Summary: A transparent overview of the financial health including income, expenses, and the balance sheet.

Revenue Sources: Breakdown of revenue sources such as donations, grants, and other income.
Expenditure Breakdown: Categorization of expenses like program services, administrative costs, and fundraising expenses.

6. Donor Acknowledgment: Recognition of donors, sponsors, and other supporters, while respecting privacy preferences.

7. Success Stories: Real-life stories showcasing the positive change brought about by the organization’s work.

8. Challenges and Future Plans: Discussion of challenges faced and how they were overcome, along with plans for the future.

9. Visual Representations: Infographics, photographs, and charts to visually represent data and humanize the impact.

10. Next steps: Offer your audience a way to keep the conversation going, donate, volunteer, or contribute in some way to your cause.

Call to action: Asking your audience to act in a small but meaningful way that gets them involved with your nonprofit and deepens the relationship.
Contact Information: Providing contact information for further inquiries or support.

11. Legal and Compliance Information: Any necessary legal disclosures, audit statements, or compliance information.

12. Appendices (if necessary): Additional information or data that supports the content of the report.

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How to design a nonprofit annual report?

Nonprofit annual report design plays a crucial role in how the information is perceived and retained by the readers. In this section, we will explore the elements of layout and typography and the use of imagery and color.

1) Layout and typography

A well-structured layout and readable typography enhance the user experience, making the report easy to navigate and read.

Consistent Layout: Maintaining a consistent layout throughout the report for a cohesive look.
Readable Typography: Choosing fonts that are easy to read and visually appealing.

2) Use of imagery and color

Imagery and color not only enhance the aesthetic appeal but also reinforce the narrative and evoke emotions.

Relevant Imagery: Using images that are relevant to the content and resonate with the organization’s mission.
Color Palette: Choosing a color palette that aligns with the organization’s brand and enhances the visual appeal.

3) Storytelling with data visualization

Data storytelling is about bringing data to life in a meaningful and engaging manner. Make sure to create a narrative arc that takes the reader on a journey from challenges to achievements.

Use charts, graphs, and infographics to visually narrate the data story in chapters to help the reader easily follow along. Don’t dump too much information at once.

4) Embracing digital design platforms

In the digital age, nonprofit reports are no longer confined to printed documents. Embracing digital platforms for creating reports can significantly enhance engagement and reach.

Digital reports are accessible, interactive, and can be easily shared, making them a powerful tool for engaging nonprofit storytelling that makes an impact.

Moreover, digital reports can be accessed anytime, anywhere, enhancing the convenience for stakeholders. They can also be shared with a click, increasing their reach and impact.

Nonprofit interactive report templates to get you started:

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Hadar Peretz

I am a Marketing Specialist at Storydoc, I research, analyze and write on our core topics of business presentations, sales, and fundraising. I love talkig to clients about their successes and failures so I can get a rounded understanding of their world.

Table of contents

What should a nonprofit annual report include? What is a nonprofit annual report? What is the purpose of nonprofit reporting? Why are reports so crucial for nonprofit organizations? Examples of nonprofit annual reports Types of nonprofit organization reports What makes an effective nonprofit report? How to write a nonprofit annual report? How to design a nonprofit annual report?

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