Is it Time to Rethink Your Nonprofit Annual Report?

3 min read

Every year, we round up our favorite annual reports and share them with you. You can see our favorite nonprofit annual reports from 2020 here, and from 2019 here. This year, however, as I sat down to start my roundup, something wasn’t sitting right with me. I realized that the more I’ve started to lean into our Shared Power Strategy™ philosophy, the more I’ve begun to feel that annual reporting is in need of a shakeup.

Why? Because annual reports are written with just one audience in mind: the donor. But as the Shared Power Strategy™ philosophy reminds us, donors are just one of your organization’s many important stakeholders. And they’re certainly not the only people who care about the impact your organization is making every year. 

As the Shared Power Strategy™ philosophy reminds us, donors are just one of your organization’s many important stakeholders. And they’re certainly not the only people who care about the impact your organization is making every year. Click To Tweet

What about your program participants? What about your partners and volunteers? What about the people who are part of the communities your organization exists to serve? Don’t they deserve a regular update on what your organization is doing every year to advance its mission? Don’t they deserve an opportunity to assess whether your organization is addressing their priorities, and aren’t you interested in receiving their feedback? If the answer is yes, it might be time to rethink how you handle annual reporting.

A different way to shape your nonprofit annual report

As the end of your current fiscal year nears, I’d like to suggest you try something radical. Throw out your nonprofit annual report in its current format. Then, ask yourself: what would it look like to share our progress on our strategic plan transparently and collaboratively with all our stakeholders? What would it look like to make an annual report an opportunity to both celebrate what we’ve accomplished, and ask for more feedback from our stakeholders on what we plan to do next?

If you follow our process for strategic planning (or a similar one), your organization’s work is already focused on a clear set of priorities, which we call pillars, and you’re already intentionally pursuing those pillars through measurable objectives and key results. Those items can easily be transformed into a different sort of annual report — one that both inspires donors to keep supporting your organization and keeps your other stakeholders informed of your work, while asking for their continued feedback.

In your new report, you might include items such as:

  • An update on your organization’s progress toward its strategic plan pillars and objectives
  • Stories that illustrate that progress through the voices of the people and communities you serve
  • Key wins and successes from the last year
  • What you plan to focus on in alignment with your strategic plan pillars and objectives in the upcoming year
  • Specific areas where you could use support from stakeholders like donors or volunteers in the next year
  • A venue for other stakeholders, such as community members and program participants, to provide input or feedback on the things you’re going to focus on in the year ahead

Of all those items, the last is the most important. It’s how you can make the Shared Power Strategy™ philosophy something your organization lives out on an ongoing basis, not just when it’s time to develop a new strategic plan every three years.

Yes, an annual report is a powerful tool. But how much more powerful could it be if you repositioned it to engage all your organization’s stakeholders, not just your donors?

Yes, an annual report is a powerful tool. But how much more powerful could it be if you repositioned it to engage all your organization’s stakeholders, not just your donors? Click To Tweet

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