Time for a quick quiz (don't worry it should be easy).
What's the problem with "annual reports"?
A. They're too long
B. They're boring
C. They focus too much on the organization and not on the donors
D. They require a lot of time and effort from staff and there's no guarantee donors will even look at them
E. All of the above
If you answered E, you would be right! This poses a dilemma. Organizations need to share accomplishments and show gratitude to their donors, but is the "annual report" the way to do that?
First, let's stop calling it an annual report and call it an impact or gratitude report instead. Plus, sharing accomplishments and showing gratitude is something you can do more than once a year (more on that below). In this post, I'll use the term impact report (but don't forget about gratitude). One organization recently sent me something called 2023 Donor Impact Report (yes!).
However, renaming it is just the first step. If you're still creating one of those long, boring booklets, you're not making much of an improvement.
It's possible to make this a better experience for both donors and nonprofit organizations. Here's how.
You don't have to do an "annual report"
Nonprofit organizations aren't required to do an annual report. This doesn't let you off the hook for sharing accomplishments with your donors. You could send short impact reports a couple of times a year. This makes a lot of sense if taking on a big report sounds too overwhelming. Shorter, more frequent updates are better for your donors, too.
If you decide to do a report once a year, I encourage you to move away from the traditional multi-page one. Aim for something no longer than four pages. Bigger isn't always better.
Your impact report is for your donors
Keep your donors in mind when you create your impact report and include information you know will interest them. Also, donors have a lot going on, so that's another reason not to create a huge report that they may or may not read.
You might want to consider different types of impact reports for different donor groups. You could send an oversized postcard with photos and infographics or a one-to-two-page report to most of your donors. Your grant and corporate funders might want more detail, but not 20 pages. See if you can impress them with no more than four pages.
Keep in mind that the human attention span is about eight seconds. Granted, most of us can stay focused longer than that, but your impact report is competing with other pieces of mail and whatever else is going on in your donors' lives.
Imagine your donor receiving a traditional long report and thinking it might be interesting but she doesn't have time to read it right now, so it sits in a pile for two months and then gets recycled, unread. But if you send a postcard or a short report, your donors can get a quick glimpse of how they're helping you make a difference.
Pour on the gratitude
Donors want to feel good about giving to your nonprofit. Make sure your impact report is focused on thanking donors. You could go one step further and call it a gratitude report. If you decide to do three or four short reports a year (highly recommended), make at least one of them an all-out gratitude report.
Use phrases like Thanks to you or Because of you to show appreciation to your donors for their role in helping you make a difference.
Tell a story
Donors want to hear about the people they're helping. You can tell a story with words, a photo, or a video.
For example –Leah, a single mother with three kids, has been struggling to make ends meet over the last few years. It's been hard to find steady work and rising food costs make it difficult to afford groceries. She also wonders if she'll have enough money to pay rent and utilities each month.
Leah had never gone to a food pantry before and felt ashamed to have to do that. But when she reached out to the Eastside Community Food Pantry, she was treated with respect and dignity. Now, thanks to donors like you, she's able to bring home healthy food for her family.
An engaging story is one of the most important elements of your impact report.
How are you making a difference?
The theme of many reports is look how great we are. They're organization-centered instead of being donor-centered and community-centered.
They also include a bunch of statistics, such as the number of clients served. You need to share specific accomplishments that show how you're making a difference.
Focus on the why and not the what. Numbers don't mean a lot without a story or example. For instance, Thanks to donors like you, we were able to serve more students in our tutoring program. X number of students are now getting better grades and are able to graduate from high school on time.
Make it visual
Remember, your donors have a lot going on and won't have much time to read your report. Engage them with some great photos, which can tell a story in an instant. Choose photos of people participating in an activity, such as volunteers working at a food pantry or a one-to-one tutoring session. Be sure to get permission if you want to use pictures of clients.
Use colorful charts or infographics to highlight your financials. This is a great way to keep it simple and easy to understand. Include some quotes and short testimonials to help break up the text.
Be sure your report is easy to read (and scan). Use at least a 12-point font and black type on a white background. A colored background may be pretty, but it makes it hard to read. You can, however, add some color with photos, headings, charts, and infographics.
Write as if you're having a conversation with a friend
Be careful about using jargon. Most of your donors don't use words like underserved or at-risk, and neither should you. Use everyday language such as – Because of you, we found affordable housing for over 100 homeless families. Housing prices continue to skyrocket and a shelter is no place to raise a family. We're also seeing an influx of migrants who need housing. Now, these families have a place to call home.
Write in the second person and use a warm, friendly tone. Use you much more than we.
Skip the donor list (and the letter from your executive director)
Think twice about including a donor list in your impact report. It takes up a lot of space and there are better ways to show appreciation. If you feel you must have a donor list, you could put one on your website or just include major funders. Including a QR code directing people to your website for more detailed information is a good way to ensure a shorter report.
Also, do you need a letter from the executive director? These tend to be very organization-centered. If you must have one, make sure it focuses on thanking your donors.
Send it by mail
Be sure to send your impact report by mail. It's more personal and donors are more likely to see it. Don't let costs deter you from sending something by mail. Remember, you have the option of sending short impact reports.
You could also send an electronic version a few weeks later as a follow up.
Planning is crucial
I know putting together a yearly impact report can be time-consuming. One way to make it easier is to set aside a time each month to make a list of accomplishments. This way you're not going crazy at the end of the year trying to come up with a list. You can just turn to the list you've been working on throughout the year.
You also want to create a story and photo bank and you can draw from those when you put together your impact report.
Creating a shorter report or an infographic postcard will also help make this easier for you. Once again, you have the option of not doing a yearly impact report and sending periodic short updates instead.
Whatever you decide, put together an impact report that's a better experience for everyone.
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