Essentials of a nonprofit annual report

Your nonprofit annual report is a key component in your annual communications plan. It gives you the opportunity to remind donors about your vision, mission, and key accomplishments. Nonprofits often err by either underinvesting in their annual report or overloading it with too much content. The goal is to be efficient and effective with your words.

Here are the essential elements you need to include along with the estimated number of pages each will consume. Your report will have to account for the unique characteristics of your organization but the following is meant to be a helpful guide:

Letter from the Leader (1 page)

Donors deserve to hear from the person who is leading the organization. This letter sets the tone for the entire report. They need to hear the achievements and challenges your organization faced over the past year. Make sure you include at least one ambitious goal you have for the year ahead. Conclude it with gratitude for their generosity. 

Mission + Metrics (2-4 pages)

Remind donors why you exist. State your mission and then get to the heart of your impact. Share key impact metrics. How many people did you impact? How many places did your organization reach? How many different outcomes can be measured? 

Program Overview (4+ pages)

The size of this section depends on the number of programs and services your organization offers. It’s just an overview, not a technical guide. Use this section to highlight what you do and where you do it. Include at least one picture and one key stat with each program. 

Impact Stories (2 pages)

As important as numbers are, donors need to know the difference you are making in someone’s life. You need a representative impact story. Include a picture of the person if possible and describe how their life is better as a result of the work you are doing.

Financials (2 pages)

Present the income and expenses for the year. You don’t need a line item budget but you do need to show how much money went to programs and how much was required for operations. If expenses exceed income, make sure you provide a few sentences of explanation. Use this page to highlight your audit or any other third parties who have endorsed your organization. 

Testimonial (1 page)

You need someone to speak on your organization’s behalf. It can be a board member, corporate partner, donor, foundation leader, or beneficiary. But you need to include someone’s voice other than your own who can build credibility. A quote will suffice!

Leadership (2 pages)

Who are the key leaders of your organization? You have to include the executive team and the board of directors. If your organization is small, you can include the entire staff. 

Looking Forward (1 page)

As great as the last year has been, your organization is forward-looking. State at least one ambitious goal or challenge for the next year. It will remind your donors why your nonprofit needs their ongoing support.

You can also read about the best practices when it comes to your annual report. At Roundtree, our goal is to help 100 organizations raise $1B over the next five years. We believe you grow healthier relationships with donors through consistent communication. Use your annual report as a way to give donors a deeper look into your nonprofit and make them feel valued for their donation. View some examples of annual reports to learn from what others are doing.