Fundraising Q&A: What should I include in my annual report?

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What should I include in our charity's annual report?

While the name "annual report" seems self-explanatory, let me just clarify. Corporations (for-profit businesses) need to report to their shareholders annually and outline the preceding year's activities, whereas Canadian charities don't have the same obligation. However, many organizations do prepare and distribute a summary of their accomplishments and financials to their donors and other stakeholders, usually at or around their annual general meeting.

In the United Kingdom, the Charities Commission requires an annual report in order to discharge the charity trustees' duty of public accountability and stewardship. In contrast, Canada Revenue Agency only calls for the T3010-1 Registered Charity Information Return.

Yawn!

Annual reports are notoriously dry and dull...a fact that is aggravated by many charities' limited budgets for creative and production. Sometimes the marketing and fundraising departments have failed to define or communicate their needs to each other (even when they're in the same office or worse, are the same person!). Many charities haven't adequately explored the purpose and benefits of their annual report.

In a recent UK study entitled Surveying the Sector - A Review of Charitable Trustees' Annual Reports Deloitte analyzed samples from 50 of the British Isles' biggest charities by income. The worst complaints were around too much text with limited photographs or the use of graphs and charts to make the narrative more interesting.

What makes an annual report compelling?

In response to a question of what charities should include in their annual reports, Mary Jane Braide of MJ Braide Corporate Development says:

"Too often, annuals are used to broadcast 'everything we did this year and how great we are', which does not make for compelling reading. While a strong nod to productivity is in order, I advise organizations to use the precious attention of readers to engage them through stories that reinforce impact and results. Take the opportunity to reconnect your audience to why what you do matters, not how much you do."

Decide how best to communicate the "why what you do matters" and you can highlight your achievements while strengthening your case for ongoing support. In effect, make your investor report(s) serve as a two-way mirror. The historical perspective can build credibility based on a solid track record but more importantly, invite people to look beyond the reflection and help your charity reach new heights. Demonstrate to your readers and investors how their interests intersect with your organization's past and future accomplishments.

Mary Jane goes on to say, "I think the time has come to move away from the one-size-fits-all annual and instead develop targeted messages to different audiences. Government granting agencies don't tend to need the same information as donors, volunteers, staff etcetera. This also allows you to specialize HOW you distribute your annual messages — print, online, Facebook, tweets, in-person."

Who needs what information?

Decide how much information is necessary, to whom and how often you intend to update and convey your messages, ideally based on your readers' preferences. Summarizing the year (if that's the way you choose to report) will be much easier to condense if you've kept a running list and total numbers each month.

AUDIENCES MESSAGES (within the past year)
Clients/service users Major events and developments
Board members and other volunteers Significant plans and upcoming activities
Donors and prospective donors Services/programs ? facts and figures
Members Service performance information
Staff Financial information
Funders Board member list and credentials
VIPs List of staff or at least senior management
Partner organizations List of external partners
Professional advisors More?
Contractors  
Vendors  
Others?  
 

Summary

The annual report — quarterly review, donor update, results report or whatever your charity decides upon — must be part of an overall communications plan. Constantly reinforce the organization's image, objectives and results. There should be a set look to all your communications that brands your identity and builds momentum and interest.

If you are lucky, you have three to five seconds to grab your reader's attention...ensure your strategy is engaging! Examine what you are currently spending to write and produce a glossy, colourful annual report (including staff time, graphic design and printing) and investigate alternatives. Reduce your carbon footprint and postage costs by printing less and providing juicier morsels.

  • Tell personal stories that demonstrate the impact and results of your work
  • Be clear and concise
  • Demonstrate how your reader can make a difference
  • Target your message according to your audience
  • Use pictures to capture attention
  • Describe key messages in captions for those who just like the pictures
 

Other resources

  Editor's Note: How is your charity communicating differently in the 21st century? We'd like to know! Email your examples to editor@charityvillage.com.

Cynthia Armour is a freelance specialist in fundraising and governance. A Certified FundRaising Executive (CFRE) since 1995, she volunteers as a subject matter expert with CFRE International. She works with boards and senior staff to ensure that strong leadership will enhance organizational capacity to govern and fundraise effectively. Contact Cynthia directly at 705-799-0636, e-mail answers@elderstone.ca, or visit www.elderstone.ca for more information about her services.

To submit a question for a future column, or to comment on a previous one, please contact editor@charityvillage.com. No identifying information will appear in this column.

Disclaimer: Advice and recommendations are based on limited information provided and should be used as a guideline only. Neither the author nor CharityVillage.com make any warranty, express or implied, or assume any legal liability for accuracy, completeness, or usefulness of any information provided in whole or in part within this article.

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