The Annual Report
The Annual Report is a document that outlines the activities of your organisation over the past year and provides an outlook for the future. Through the annual report, a nonprofit organisation can be proactive in demonstrating its accountability to members, stakeholders and the community. The board is responsible for the annual report and it should not be delegated exclusively to the CEO. The size and sophistication of the annual report will depend on the size of the organisation and their access to resources. The following ideas could be valuable to small to medium size nonprofits that are planning to produce a modest two to four page document.
- Make the annual report an “annual” undertaking not a reaction to an external request that you can respond to every few years.
- An annual report is not the same as the independent auditor’s report or the treasurer’s financial report although key financial information should be included in it.
- An annual report can be prepared prior to the Annual General Meeting (AGM) or prepared shortly after and drawn from reports approved at the AGM.
- Before you start work on the annual report be clear about who will receive it. It should be written for members, important stakeholders and your external community.
- If you produce and distribute a newsletter, consider publishing a special Annual Report edition.
- Always include financial information like revenues and expenditures. Including the four major revenue categories and six major expenditure categories may be sufficient information to demonstrate financial accountability. Consider conveying this information in pie chart format.
- If you have an independent auditor’s report for the year or a detailed Treasurer’s report indicate that these are available to anyone who is interested.
- Include a list of your board of directors, including the offices of the board and key staff members.
- Highlight the organisation’s mission statement and the vision and values of the organisation.
- Include a short report from the board on governance and strategic issues. This is usually prepared by the board chair. Also, include the CEO’s report on operations. Both should highlight some of the organisation’s main accomplishments over the year and the challenges and opportunities that lie ahead.
- If you have embarked on a program of outcome measurement, the annual report is a logical place to report on how the organisation is faring.
- Decide in advance on how the annual report is to be distributed and how much it will cost in dollars and staff time.
- Send the annual report to key funders and stakeholders and include a letter outlining their particular interests.
- Ensure the annual report is posted on the organisation’s website.