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    HomeNonprofit Management TechThe Future of Annual Reports: Everything You Need to Know (with Examples!)

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    The Future of Annual Reports: Everything You Need to Know (with Examples!)

    The nonprofit industry is always evolving—it especially has in the last few years. As digital work has become the norm, more and more industry standards have begun to shift. 

    So what does that mean for annual reporting?

    In this blog post, we’ll break down all the basics of nonprofit annual reports, and why digital reporting is the future.

    What is an annual report?

    Most organizations know that a 990 form is a required document from all nonprofits at the end of their fiscal year. This document, like an annual filing from a for-profit company, covers important financial information. 

    But, a nonprofit annual report is an optional yearly review that’s distributed to stakeholders—either via the web or in print. This annual report is like a yearbook of sorts for charities. Usually, they detail the organization’s yearly accomplishments, progress, and even setbacks. In essence, annual reports are a chance for nonprofits to connect with their stakeholders and update them on their mission.  

    What should be in a nonprofit annual report?

    All annual reports are different depending on the organization’s mission, values, and audience. But, most include:

    • Cover photo/design
    • Table of contents
    • Message or letter from leadership
    • Statement of mission and values
    • Accomplishments
    • Impact stories and testimonials
    • Accurate financial data
    • Volunteer and donor recognition
    • Staff and board lists
    • Future goals
    • Contact page

    Regardless of their contents, though, annual reports serve to inform and inspire readers. And hopefully, turn them into donors. 

    Why are web-based annual reports the future?

    Now that we’ve covered some of the basics, let’s explore the future of annual reports.

    Usually, annual reports come in two formats: print or web-based. While no method is “correct,” there are some pros and cons to both. And for the future of reporting, there’s one clear winner.

    Print annual reports

    Print annual reports are usually in the form of a pamphlet or physical newsletter. Handed out at events, or sent through the mail, print annual reports used to be the most popular form of annual reporting.

    Where print annual reports go wrong 

    They don’t tell a story

    Even if well-designed, print annual reports often fall short when it comes to storytelling. 

    Without the ability to include interactive elements like timelines and clickable charts, readers can be left without crucial context. Meaning, they won’t fully understand or relate to your mission and goals. When that happens, nonprofits risk losing support.

    They don’t create an emotional connection

    Successful nonprofits know a thing or two about creating an emotional connection. 

    Most charitable contributions come from people who feel connected to the mission of the organization. Nonprofits that don’t utilize video marketing tactics or interactive case studies to engender that connection often fail to intrigue supporters.

    They don’t offer immediate or flexible giving

    While print annual reports can encourage donations, they don’t offer immediate or flexible ways to give. 

    Clickable donate buttons with flexible giving options offer a more immediate and effective way of inspiring contributions.

    They don’t meet supporters where they are

    Most stakeholders are giving online, and rarely read printed pamphlets anymore. That means, your printed annual report might just end up in the waste bin. Plus, paper reporting, with long dense paragraphs, rarely keeps the attention of readers.

    They aren’t recyclable  

    While print annual reports can be handed out at events or sent via mail to supporters, they can’t be repurposed for social media posts or newsletter content.

    That means that all that time and effort put into the annual report can only go so far.

    They don’t turn readers into donors 

    Lastly, printed annual reports don’t turn readers into donors. 

    Expert engagement and inspiration tactics are what turn readers into long-time contributors—and paper annual reports don’t always make the cut.

    Why digital or web-based annual reports are the future

    Digital, web-based annual reports are a great way to engage and inspire supporters. Let’s explore why. 

    Digital reports offer better storytelling

    Unlike paper printouts, digital, web-based reports can help nonprofits tell their unique stories. 

    With the right charts, graphs, and clickable content, readers can better understand your mission—and feel a part of it.

    Digital reports offer more integrations

    One of the biggest reasons digital reports are more effective than print reports is their capabilities. 

    With the ability to embed social media posts, clickable donate buttons, and even YouTube videos, readers can get a holistic picture of your organization—all without having to leave the report.

    Recyclable 

    Great web-based reports can be used for a variety of other purposes. 

    Great for social media, newsletters, and even a website, a digital report is a gold mine for recyclable content.

    Better capabilities

    Unlike print annual reports, digital ones save time and energy

    With excel, social media, and YouTube integrations, nonprofits can save lots of money, and save themselves from plenty of headaches. Plus, with graph and chart builders, and pdf download options, nonprofits don’t have to invest in multiple tools for their reporting.

    What do successful digital reports look like? 

    Though all digital reports are different, the best examples have a few key things in common.

    They’re full of video

    Graphical user interface, website

Description automatically generated

    Video marketing is one of the best ways to create an emotional connection with stakeholders. In fact, 54% of consumers, on average, have cited wanting to see more video content from the brands and organizations they support. 

    By showing videos of beneficiaries, event recaps, and even donor testimonials, organizations can draw readers to their stories more effectively.

    They’re bursting with calls-to-action (CTAs)

    Graphical user interface, website

Description automatically generated

    Once readers are inspired by your story, they should be given the chance to take immediate action. 

    Great annual reports include buttons for volunteer- sign-ups, newsletter signups, and of course—donation buttons.

    They nail data visualization 

    Chart, line chart

Description automatically generated

    Relaying financial information is often one of the toughest parts of annual reporting. Nonprofits are often unsure of how to present their data in a way that’s compelling. 

    By creating graphs and charts, nonprofits can easily communicate their qualitative data to stakeholders without confusing or boring them.

    They include real and/or stock imagery

    A group of people wearing masks

Description automatically generated with medium confidence

    A picture is worth a thousand words. For nonprofit annual reports, much is the same. 

    Great annual reports include staff photos, photos of events, and beneficiary photos. Instead of writing about the people impacted by donations, they show them.

    They embed social media posts

    To stay abreast of industry news and trends, and to show stakeholders that your nonprofit is aware of industry developments, great annual reports embed social media posts. 

    Social media posts show stakeholders a commitment to staying relevant and to becoming the leading voice in the space.

    They prioritize design

    It’s easy to let the design of an annual report fall by the wayside. But, the way an annual report looks really does matter. 

    Great annual reports use their unique brand colors and fonts which serve to remind stakeholders of their brand identity—essential for standing out amongst similar organizations.

    Best practices for designing your annual report

    When creating your own digital report, it’s important to keep a few best practices in mind.

    Keep it clear and concise

    As we’ve noted before, readers don’t want to read long, dense paragraphs about your mission. 

    Instead, keep your text clear and concise, and use visual storytelling elements when possible.

    Focus on being donor-centric

    Aside from expressing gratitude for stakeholders, nonprofits should ensure that all of their language is donor-facing. 

    Instead of focusing on the perspective of the organization when creating your report, consider the perspective of your stakeholders. Consider what information they want to know and why. 

    Make it interesting

    Above all, an annual report has to keep its readers engaged and interested. Including compelling visual elements, scrollable content, and more, you’ll ensure that readers will stick around.

    Wrapping it up

    A digital, web-based report created with software like Yearly, is an expert way to inform donors and inspire them to take action. By ditching the printed reports and saying goodbye to snail mail, you’ll turn readers into lifelong donors. 

    To get started on your digital report, check out Yearly’s free 14-day trial!

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