What Is an Annual Report and Why Should Nonprofits Publish One?

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Annual reports can be very important for nonprofits. They are instrumental in keeping people informed about the good work you and your nonprofit are doing. The annual report is a document that highlights a nonprofit’s major accomplishments. Not only is it mandatory for nonprofits to provide the IRS with an annual report, but it can also be helpful to offer this report to your board members, donors, or even potential donors. The document is meant to highlight the nonprofit’s major accomplishments.

Having an annual report also helps to:

  • Develop trust and enhance reputations.
  • Inspire readers by sharing the mission of the organization.
  • Thank donors for their contributions.

What Exactly Goes Into an Annual Report

  • A focused, clear mission that flows through the entire document

Your nonprofit should present a clear focus throughout the annual report. This means including the organization’s mission statement from the time of its establishment and centering the entire document around that very same company mission.

  • Major achievements throughout the year

This section is very important for sparking an interest in your nonprofit and its work. In this part, you should talk about the successes and achievements your nonprofit had during the past year.

For instance, perhaps your organization won a few grants or held a major fundraising event that broke a new record for number of donations. Were you able to finish a major project? You’re going to want to highlight any and all of these accomplishments. You can also break this down into easy-to-understand statistics, graphics, and any other visuals that will illustrate your progress to the reader.

  • A financial statement

You should be upfront with your supporters, donors, volunteers, or community members about how much money is being spent and how much money you still need. This can also help establish trust in your organization and give your supporters an idea of how they can assist your organization financially.

  • Major contributions received

Your annual report is not only about highlighting your organization’s successes, it’s also about thanking the people who helped you get there. Listing and publicly thanking those who assisted you along the way is an important part of a well-written annual report.

Keep Your Stakeholders Up-to-Date

Overall, many nonprofits depend on their donors for support throughout the year, and maintaining that goodwill is critical. One benefit of distributing an annual report is letting your donors know where their money is going. Showing the ways in which your nonprofit is excelling and giving updates on the organization’s mission is imperative.

Discussing how, what, why, and where your organization succeeded this year can make people excited to join you next year. Additionally, this can lead to more volunteers, more community involvement, and more people interested in contributing monetarily as well.

GrantNews Notes

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