10 ways to improve your NFP’s annual report

Many not-for-profit (NFP) organisations feel daunted by the prospect of putting together an annual report and believe it requires a lot of effort for little return. However, if you know what information to include and how to present it, annual report writing can be easy.

Here are a few ways your organisation can improve the content and layout of its annual report.

1. Start early

Writing an annual report should not be attempted in one sitting, particularly if it’s the week before you wish to have it ready. Producing a professional document that reflects positively on your NFP organisation requires time to make editorial and design changes so it’s important to allow enough time to ensure these processes aren’t rushed or overlooked.

2. Have a production document

It’s a good idea to create a production document for your annual report. Production documents are used to divide the report into sections, such as recent projects, financial position and performance, and goals for the coming financial year. The production document collates all relevant information and forms a plan so that when it’s time to start writing the report you know exactly how to structure it.

3. Include a summary

Although some people will read your annual report cover to cover, many will not. For this reason it’s important to present a summary at the beginning of the report that highlights the most important information. The summary should be concise and use dot points and infographics, when appropriate.

It’s important to include financial statistics in the summary as they paint a picture of the overall performance of the organisation. However, annual reports should be positive so if financial statistics show a drop to the previous year provide a valid reason for the drop and/or explain the strategy your organisation will employ to improve the outcome in the coming financial year.

4. Don’t include administrative updates

The annual report is primarily for the benefit of current members, donor and stakeholders who want to know how your NFP’s mission is being achieved and how it’s tracking financially. Administrative updates, such as the installation of new software and the streamlining of processes, should be left out of annual reports as they don’t relate to your mission or finances.

5. Outline how money was spent

Although it’s important to highlight your revenue generation it’s more important to outline exactly how this money has been used by your organisation.

When presenting financial information ensure it’s easy to understand. Data shouldn’t be presented in its raw state but should be organised into tables and graphs that show a comparison against previous financial years.

6. State goals for the next financial year

Annual reports are a great medium through which to outline financial and strategic goals for the coming financial year. It’s important to be specific when outlining goals in your annual report. For example, ‘to increase funds’ isn’t a sufficient goal to present to current and potential members, donors and stakeholders. You need to explain the exact steps you propose to take to achieve the goal of increasing funding.

7. Keep it short

Many people have the misconception that annual reports need to be long and detailed documents. However your annual report is more likely to be read if it’s shorter. Generally four to eight pages of text is sufficient.

8. Pay attention to design and layout

To increase the marketability and readability of your annual report, attention must be paid to design and layout. As well as looking professional, the report should be eye-catching and hold reader’s attention through the use of images, colour, subheadings, tables and graphs.

9. Check donor lists

Some NFP organisations elect to recognise those that have helped them financially by supplying a list of donors in their annual report. If your NFP organisation chooses to do this, ensure the list is up-to-date and all names are spelt correctly.

10. Ensure it reaches your target market

Once your annual report has been written spend some time distributing it to the right people. It’s important to have the document available in a soft copy PDF as well as a hard copy version to reduce printing costs and maximise its ability to be distributed.