Nonprofit Matters - Dr. B.J. Bischoff


Use an annual report to tell your nonprofit’s story

A lthough nonprofit organizations are not required by law to publish an annual report, it can be an effective tool for the leadership of a nonprofit to share major accomplishments, recognize key supporters, and forge new partnerships. Plus, many philanthropic foundations and corporate giving programs are now requiring nonprofits to submit their annual report with their funding requests.

An annual report doesn’t have to be a slick, 20-plus page, multi-color, professionally printed document. It can be a simple two-page report that’s posted on an organization’s website and only printed when necessary. But not to have one at all is a big mistake.

Ceres Community Project, a Sebastopol-based nonprofit that provides free, healthy meals to people struggling through an illness, has expanded to Sonoma over the past 12 months. Ceres produces a user-friendly, attractive annual report as a full-color booklet that can serve as a model for local nonprofits.

According to Ceres Executive Director Cathryn Couch, “Our annual report is the most comprehensive tool we have for telling our story. We use the annual report development process to step back and ask the question, What is the most important story we can tell this year?  And then we carry that messaging through all of our communications throughout the year. We create and produce our annual report in-house — writing, photography and design — so that all we pay for is the printing. This makes it a cost-effective tool that we use throughout the year to thank and welcome new donors, to send to foundations, and so forth.”

A nonprofit annual report should include a description of the organization’s accomplishments, results, and impact made in the community. It should clearly explain how it spent its revenue and the sources of those funds through visual representation, such as pie charts or bar charts, and include simple explanations of financial trends. Most annual reports also include lists of donors, volunteers, staff, and board members as a way to publicly thank those who have served the organization during the year.

The Boys & Girls Clubs of Sonoma Valley is another local organization that also faithfully creates a comprehensive annual report. Its Development & Marketing Director, Rachel Cusick, said, “We use our annual report as a cornerstone for all communication. It provides a snapshot of our organization and serves a critical role in providing overarching transparency for donors, community members, and even staff. The annual report establishes our mission, values, and finances and helps to connect our strategic path from year to year.”

Quality annual reports include photos that tell the organization’s story with captions that connect the photos to the organization’s mission. They also include personal profiles of volunteers or people served. Many annual reports include a call to action, so that community members know how they can support the organization or benefit from its services. To save time, nonprofits should consider creating a standard template they can use each year with updated information.

Barbara Cullen, executive director of WillMar Family Grief & Healing Center, said she is  currently developing the organization’s first comprehensive annual report because “an annual report is not only a valuable resource for donors and foundations, it is an important tool to document a year of meaningful and successful service to our community.”

Now is the time for nonprofit leaders to start planning the content and layout for their 2014 annual reports. If the leaders of any nonprofit organization are still asking themselves if they should bother investing the time it takes to create an annual report, the answer should be a resounding yes.

Dr. B.J. Bischoff is the owner of Bischoff Performance Improvement Consulting, a Sonoma firm specializing in building the capacity of nonprofit organizations and public sector agencies to better serve their stakeholders. She assists her clients with strategic planning, training resulting in performance improvement, fund development, and community relations.  She is Past President of Impact100 Sonoma and provides assistance to the Sonoma County Department of Human Services in its implementation of the Sonoma County Upstream Investments initiative. Contact her at bjbischoff@bjbischoff.com.

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