Annual Reports are excellent marketing tools for your nonprofit organisation
Your nonprofit organisation’s annual report allows you to share the story of your organisation and its successes with your various target audiences. It is through your annual report that you build and maintain support for your organisation’s brand. This is achieved by encouraging, inspiring, thanking and motivating current donors, volunteers your organisation’s staff. They are also wonderful marketing tools for potential donors, volunteers and staff.
There is a lot of talk around what makes a good annual report. Today, there is a focus on the report being used to tell a story showing the impact the organisation has in the community. This fresh new approach shows the return on investment and justifies he organisations existence.
Annual Report versus Board Report
It is important at this point to make a clear distinction between the annual report and the board report.
The annual report is a more focused on highlighting the achievements and successes in the year. Let it tell your organisation’s story through real human experiences so that your audience has clear understanding of what it is that you are doing and achieving. Make your language clear and easy to understand, give an explanatory paragraph or two for your financial statements so that non financial people can understand it. Your annual report should also be visually appealing so remember to include relevant photos with captions.
The board report or director’s report is where you share the more in depth facts, figures and administrative details. It is more the nuts and bolts of what needs to be communicated. Here you will share information like you implemented a new back office system and what the results were of that implementation from a more “technical” standpoint.
Annual Report Content
The following information/sections should be included in your annual report – how you lay it out is entirely up to you.
Remember to include your organisation’s basic information. For example, registration information with relevant regulators and contact details:
Your organisation’s vision and mission;
Governance - including:
- An introductory message by the chairperson as the leading authority of the organisation. This introduction is key as it highlights the activities of the past 12 months at the strategic level and also a way forward;
- A list of governing body members with their photographs and/or their background information detailing their individual roles within the organisation i.e. title and brief description. This should include members that resigned and joined the organisation during the course of the year. Qualifications and experience of each board member is important including other board involvements;
- A Governance Structure including activities (aligned to roles and responsibilities of Board) achieved by those structures including the number of meetings attended by the members of each committee and or at board level. Where your organisation does not have committees then the board may just state how it executes its responsibilities;
- Any major changes in your memorandum of association or trust deed or constitution;
- Risk Management including internal controls in place to give assurance that they have been considered and dealt with.
The Operations Report
This report is prepared by chief executive officer, executive director or managing director. The operations report may be separated according to functions of the organisation or by strategic objectives lined out on the business or operational plan e.g.
- Organisational chart;
- Depending on the reliability of your data, you may even include a table which details staff compliments/components in terms of Employment Equity Act;
- Indication of permanent staff and volunteers. High impact changes, these should include; the number of new appointments versus dismissed or resigned;
- Awards of long service for volunteers including board and staff.
- Marketing programme summary including aims and objectives for that year and what was achieved;
- Targets for the upcoming year.
Service Delivery – Programme
This outlines activities, projects or accomplishments carried out by organisation as per 12 months’ business or operational plan. It underscores mission related achievements.
The section covers the stated objectives of the service with a focus on the community needs. It is based on researched facts or management estimates. The achievements should focus on what the planned activities were versus what actually took place. It should also discuss the variances and the reasons for these variances as well as general challenges faced by the organisation. Rather than saying that funding is the biggest challenge - discuss what the funding will be spent on. This will encourage current donors to continue to donate and potential donors to see what is needed and heed the call to action.
Where there ad hoc services or duties were performed in the community, these should be included as new developments and be explained why they are relevant to the organisation’s mission and vision.
- The Need - Solutions to what is foreseen as challenges to achieve such (risk management);
- Estimated impact – pilot;
The success stories structured i.e.
- What was the problem?
- What was the solution?
- Impact assessment.
This section should include both the narrative and the quantitative information; such may not be easily available if it is not embedded within the monthly reporting process. The design should also not neglect pictures and graphs.
Conclusion should include what the organisation intends to do the following. This should take account of future projections; manpower that may be required to accomplish these. The report should be prepared by the chief executive officer or executive director.
The introduction of this report may include the impact of economic (macro and micro level), socio economic indicators’ impact on the organization including the financials legal framework changes, etc. Keep this section short in the annual report. You can go into greater depth in your board report.
Information to include here:
- The budget and/or the actual and major variances clarified in each category of income and expenditure. This should find its basis on what is considered as being material to the board;
- Basic financial analysis of major changes;
- What was not achieved and lessons learned a fresh and approach for the future;
- Major future expenditures - this may be linked to future commitments on the financial statements;
- Audited Financial Statements (AFS).
Also keep this section to a minimum. You can include a link to the really in depth report, but for the annual report make sure that it’s easy to understand by including an introductory paragraph highlighting and summarising the important facts.
- Independent auditor’s report;
- Annual financial statements with notes.
Acknowledgment of donors
This section should avoid categorising the donors by the amount they have given but rather list them in alphabetic order by government departments, companies, foreign funding and individuals.
Depending on the space; using company logos of company donors would be preferable. In the instances where individuals or companies do not want to be mentioned they can be grouped under anonymous donors.
If you have any questions about effectively creating your organisation’s annual report or how to ensure that your board is operating under good governance guidelines for nonprofit organisation, e-mail to email@example.com.
Blog first appeared on www.gadcs.co.za under articles.