How to write a nonprofit annual report: 6 necessary sections

Your nonprofit annual report is vital to your organization and your supporters. Get tips on what to include and how to streamline your annual reporting process.

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Nonprofit Strategies
Nonprofit Strategies

How to write a nonprofit annual report: 6 necessary sections

Your nonprofit annual report is vital to your organization and your supporters. Get tips on what to include and how to streamline your annual reporting process.

$

Raised

Supporters

Teams

Your nonprofit annual report is vital to your organization and your supporters. Get tips on what to include and how to streamline your annual reporting process.

$

Raised

Supporters

Teams

Kylie Davis
June 22, 2022
June 15, 2022

How do you keep donors engaged year over year?

As with any relationship, your supporters’ loyalty relies on transparency. You must be clear with them regarding current initiatives, how funds are used, and your future goals. When divulging all of these details to your current base, no tool is as effective as an annual report.

A nonprofit annual report is a document that highlights your program initiatives, financials, goals, and major gifts over the past year. When done well, an annual report helps establish a degree of trust with your donors, thereby increasing their potential to give again.

Below, we explain what a nonprofit annual report is, what it includes, and the easiest ways to publish and distribute the report to your supporters.

Are nonprofit annual reports mandatory?

But do you have to submit an annual report? Well, technically no, but it’s certainly in your best interest. However, you must submit an annual filing for your organization via Form 990.

Form 990, or your Annual Information Return, is a document the IRS requires. All registered 501(c)(3) tax-exempt organizations must file this document annually, turning over all financial information for the previous year.

Your annual report isn’t the same as your annual filing. Here’s the key difference: Your mandatory annual filings go to the government, and your annual report goes to current donors, board members, potential donors, and other key stakeholders. While optional, an annual report is a best practice for any nonprofit organization, providing financial transparency on how all contributions are allocated.

What is a nonprofit annual report anyway?

An annual report is a document released by nonprofit organizations each year. This report gives supporters an update on current programs, year-end accomplishments, and a summary of how funds were spent. 

There are multiple purposes to an annual report, including:

  • Inspire supporters 💪: Revisit the organization’s mission statement, and describe how current initiatives work to support that mission.
  • Thank donors 🙏: Nonprofit organizations can show appreciation by highlighting major donor partners, corporate sponsorships, or other individuals who helped close the gap toward the year-end fundraising goal.
  • Put your money where your mouth is 🙊: Your supporters want to know that their contributions will support your mission. Feature current programs and other initiatives, showing how those hard-earned dollars make a real difference in your community.

In summary, the ultimate goal of your annual report is to attract and retain loyal supporters. Hopefully, a well-written report helps prove the effectiveness of your organization and that your current programs are delivering on what you promised.

How to write an annual report: Sample table of contents

Don’t know where to start in building an annual report? Yearly offers full annual report templates you can customize to fit your organization. With Yearly, you can view nonprofit annual report examples, add images, video, graphs, and other features, then fill in your own information. Plus, Yearly offers a free trial, so you can start customizing your own nonprofit annual report template without digging into your budget.

While your nonprofit annual report will differ slightly depending upon your respective industry, there are a few sections that all annual reports should have. Be sure to include the following six areas in your report:

1. Welcome message 📣

Ask your executive director to write a letter to your current and potential supporters. It doesn’t have to be overly long or in-depth (a half-page is fine), but it should thank current supporters and provide an overview of the past year’s accomplishments.

2. Mission and values 💕

As a nonprofit, every move you make—every program, volunteer opportunity, or campaign—should support your mission. Therefore, you’ll want to mention your mission and values early on within your report.

Why does your organization exist in the first place? What are you hoping to accomplish? Revisit these areas to remind donors of how their contribution makes an impact.

3. Executive summary 👀

Here is where you get into the details of the past year, starting with a yearly recap of your program initiatives. Depending upon the size of your organization, you may not have space to dive into every program. Instead, review the key objectives from last year and which programs most successfully delivered on those goals. 

Since this section attempts to compress a lot of information into easily-digestible chunks, consider supplementing with visual aids, such as pie charts or infographics.

4. Financial statements 📊

Donors want to know how their contributions are used. Therefore, be sure to include a financial report, including a breakdown of income and expenses.

Financial statements might include a balance sheet, cash flow statements, or income statements. You may also want to consider showing financial metrics from the previous year to show how income and expenses changed over time.

5. Donor thank yous 💌

Loyal donor relationships are the backbone of your organization. Therefore, use your annual report to give a special shoutout to your supporters.

Set aside a section highlighting your volunteers, corporate partnerships, and major-gift donors. If you run a mid-sized to large nonprofit, it may not be realistic to thank every single funder. Instead, stick to the major individual or corporate partners—no one wants to read through pages of names.

6. Looking forward to next year 📆

Conclude your annual report with a look toward next year. Include year-end objectives or fundraising goals for the upcoming year and what you plan to do to achieve those goals.

Most importantly, take note of how you plan to shift your strategy within the coming year. If there were certain programs, fundraising campaigns, or other initiatives that fell flat this year, explain how you plan to remedy those efforts within the next twelve months.

Build lasting donor relationships with an annual report

A nonprofit annual report is a document that updates supporters on your fundraising goals, financial statements, and current programs. While publishing an annual report isn’t mandatory, it’s an excellent tool to help establish trust with your supporter base.

An annual report is a way to show transparency to current and potential donors, thereby increasing your potential of establishing long-term, recurring relationships. In addition, it’s an opportunity to express gratitude toward your donors for their support over the past year. If you’re unsure how to start building your annual report, check out templates and examples from Yearly.

For more ideas on how to build lasting relationships with supporters, be sure to check out the Givebutter blog

Givebutter is the all-in-one, donor-centric platform that brings out the changemaker in all of us. Givebutter comes complete with 130+ fundraising tools, a built-in CRM system, and marketing automation capabilities, all for the lowest platform fees in the industry.

Ready to see how Givebutter can help your organization? Take a tour today.

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Kylie Davis
Author

Kylie Davis

Givebutter Content Marketing Specialist

Kylie thrives on supporting others, making everyone’s jobs easier, and cinnamon in her coffee.

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What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

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Kylie Davis
Author

Kylie Davis

Givebutter Content Marketing Specialist

Kylie thrives on supporting others, making everyone’s jobs easier, and cinnamon in her coffee.