We have looked at why you might need or want to create an annual report. So now it is time to look at what to include in your annual report.
A legal obligation
If there is a legal obligation, there often are legal minimum requirements for information you must include in your annual report. You need to check what these requirements are in your context. In general, the requirements include some standard items and a list of items for your annual financial report.
It must be clear that your annual report is your annual report. So it must include information like the name of the organization, when it was established, what the legal status is, where it is located, and its vision, mission and values.
But also, information on who is in charge: who were the board members in the reporting year and who was director. Often, I recommend also including the name of the finance manager or controller.
Annual financial statement
An annual financial statement always includes a balance sheet, a statement of income & expenditure, a cash flow statement, the accounting principles applied, and notes to the balance sheet and statement of income and expenditure.
How you will present the data in these items depends on the accounting principles you apply. And these can be impacted by legal requirements, local standards or best practices. Or by donor requirements for specifications to add. For instance, some donors may require you to include a financial overview of their grant.
Don’t go tick-boxing
Of course, it is OK to make a checklist with information you must include, based on a legal or donor obligation or best practice. And to tick off what you have included. But. Don’t stop after ticking all your boxes.
There is more to include
Maybe you noticed that none of the information listed is likely to be very moving. Nobody will force you to include a story or a picture. But that does not mean your report should not include any!
If you want to use your report for accountability and for mobilizing (potential) donors, you need to really speak to the readers of your reports.
I love numbers. And to me, an annual financial statement tells a story.
But not all readers will be able to understand that story without stories written in words or visuals.
So that’s what you need to offer. In addition to the basic data, the facts and the numbers. And all of this must be one whole: one consistent message about who you are, who you serve, how you have done that in the past year and what impact you have created with all your work and activities.
Take time to find the main story
To make sure your report tells one consistent story you need to assess your data for the year and find that message. After collecting all your financial, statistical, project data and stories you must take a moment to review all of these. To see what jumps out at you, where the main message might be about your work of the past year.
And after that you may need to edit or even rewrite some parts to make sure the overall story is clear on every page and in every detail, even if not explicit. If you invest that time, this will make your report much more powerful as a marketing tool. (Think of the difference between having all the facts and reading a detective story. The detective story includes the same facts but presents them in a way that the reader cannot stop reading. This is the level of engagement you want to have from your reader. Because if your work is unputdownable you have effectively mobilized your reader into becoming a supporter.)
My key tips
- Prepare your annual report not just technically and with your head, put your heart in it to find ways to move and mobilize the readers.
- Creating one consistent story with words and numbers is a big job. Don’t underestimate it, and plan ahead carefully.
Want to know more and ask questions?
If you want to discuss this more – jump into the Facebook group and get input from a wide range of peers and from myself!
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