How to create a nonprofit Year End Report
The Year End Report can be presented to the donors or supporters in various ways. Many nonprofit organizations present these reports during their annual donor’s appreciation events. Others mail them out to the donors and volunteers every year.
In recent years, we’ve seen a growing number of nonprofit go the paperless way. This is the easiest and fastest way to distribute the report. If you have to go paperless, make sure that your audience is able to view the electronic reports. Please read Getting to know your donors to help you determine what kind of delivery system will work for your donors.
The Year End Report
The Annual report is meant for your donors and volunteers. What is contained in the reports really depends on what is important to your donors? Over the years I’ve had the pleasure to design and also look at a number of reports and I can say that there is no set standard. Each organization chooses what kind of information to include.
However, after reviewing a number of reports, I came up with a format that includes common elements found in most reports.
Before we look at some reports, I think it’s important to know that a year end report is made up of answers to some questions your donors and volunteers might have. So before you prepare a report, make sure that you know what your donors what to know. There are several ways to find out what’s important to your donors. If you haven’t yet, please read Getting to know your donors.
Knowing what’s important to your donors not only helps you prepare great reports but also helps you create a great FAQ page on your website. So if you’re doing collecting feedback from your donor’s, you’re missing out on some helpful information.
I collected a few questions I found to be common in most reports.
- What’s your mission and goals?
- What is your cause?
- Did you accomplish your previous year’s plans?
- What were your challenges?
- What impact did you make?
- How much did you raise and how much spent?
- What’s your plan for next year?
- What is your budget?
- What kind of challenges do you anticipate for next year?
- What does a successful year look like to you?
- Who are your donors
Let’s look at why you need to be answering your donor’s questions and not just the information you think is good for them to know.
For me to explain why and how you need to answer these questions in your report, I think I’ll need to create a fictitious nonprofit organization ( The WaterMe Project). Though the name is fictitious, the story is real.
The WaterMe Project
A group of doctors had gone on a mission trip to Africa. They wanted to go and do research on why the infant mortality rate was so high in Central Africa. During their stay in Africa, the doctors found out that even though there was a serious medical problem in the area, the main problem was lack of fresh water. Many people had to walk several miles in search of water.
This discovery was really disturbing because the water they walked several miles for was not even clean. Above all, the lack of water leads to health and social issues that the local people did not know how to solve. The solution was clear and the doctors knew exactly want they needed to do in order to solve the problem.
They returned home and started a nonprofit organization with a single goal to provide clean water to the area. Their solution was to drill a minimum of 250 water wells to supply water to a population of about 5000 people.
To cut the long story short, this is not your typical nonprofit. This one had a very good financial support from the beginning because these doctors were able to mobilize their fellow doctors to get involved.
In order to get things moving, the organization employed a manager and two land surveyors. The manager took care of all the paperwork, permits, contracts and training. The surveyor’s job was mainly in the field. They went out and surveyed the land and market appropriate water well drilling sites.
Due to the size of the area, the organization decided to provide water one village at a time. This would cut down on the travel costs as the machinery would stay in one area until all the wells where completed.
The process started when people applied for a well by providing proof that they owned the land. Since these were community wells, the landowner had to sign a contract that signed off the piece of land to the community. This was to prevent landowners from claiming the wells as their own.
Once the application was approved, the surveyors would survey and mark the drilling sites. Lastly, the contractor came in and drilled the well.
Before commissioning of the well, the manager would do some basic training on how to take care of the well and educated the villages on identifying the needs for repair and maintenance. The manager would then handover the well to the community after a big celebration.
The WaterMe Project Year End Report
The WaterMe project was a short-term project. The Doctors wanted to prove that the high infant mortality rate was as a result of lack of water. The aim was to provide clean water and continue their research.
The WaterMe year end report is a little different due to the on-going research. However, the report might contain some common elements found in other similar reports as shown below.
The welcome message is usually done by the Board Chair (or the Founder). The message is usually in a letter form. It should include the following information:
- Welcome and thank-you message to donors and volunteers
- Your accomplishments
- Your mission
- Talk about your cause ( the people you serve)
- The importance of what you’re doing and why it matters.
- Last years impact
- Looking forward to next year
- A quick summary of the report
The mission is very important. Your donors probably know it by now but you always want to remind them of why you do what you do.
The Program should further explain your mission. You want to make sure that you talk about how your program works. You should also talk about your cause and the impact you want to make.
Include a lot of data to show how your organization is doing. This is the part where you use a lot of graphs and images.
This is probably the highlight of the year end report. I see a lot of people flipping through the pages to get to the impact report. You want to make sure that this part is easily found and that it has great information and supporting data.
People want to see how you’re doing compared to the previous years. So it’ll be great to include a graph that shows the impact over the years.
Every successful program starts with a great leadership team and the employers or volunteers. In this section you want to present your team and how you work. List the number of people and what they do.
For example, WaterMe Project started out with three people. Their leadership section would include the following:
- The Board
- Management Team
- The Field Manager in Central Africa
- The Surveyors
Program Process / Journey
This part should show the way the program works. You have to show the Entry point, the progression and the exit. This is similar to the Buyer’s or the donor’s journey. Having a process or journey helps you determine success.
Using the example above, the entry point is when someone or a group of people apply for a well. The progress should show everything that happens in the approval process and finally the drilling process. Finally, the exit stage is when the organization hands over the well.
The image below shows the journey from the Entry point to the exit.
Program Impact and Stories
Present the overview of the program. This is where you indicate your goal and projections.
For example, Waterme Project’s goal was to provide fresh water to a district of about 5000 people.
List the conditions that lead to you taking action. You also want to talk about the current situation in terms of impact and the work that has to be done.
The impact should never be about you and what you’re doing. It should be about your cause. This is where you present how people’s lives are being impacted. In the case of WaterMe, this area would appropriate to show the changes in the infant mortality rate. Show some comparisons between the rate before moving in and the current rate. It’ll also be great to compare the areas that already have water to the ones that are yet to get water.
This is where you share a few stories about people you’ve impacted. You can also show some pictures of your stuff working.
Here’s where you present your income and expense report. I have seen people attach their tax information here but you don’t have to. The truth is that most donors will not read every detail. I would reserve that for the board. But the choice to include the taxes is yours and your donors.
Program Projections and Challenges for Next Year
You want to give your donors a glimpse of your plans for the following year. Include the anticipated challenges and budget.
Projects for the following Year
You may give some details of the projects you want to take up next year. Give the projected impact and show what a successful year looks like to you.
Thank the Donors
Start with a thank you letter from the board chair or the founder. Thank the donors, volunteers, and supporters.
List of Donors
The list of donors and volunteers is usually the last page of the report. List and acknowledge your donors and volunteers. I’ve seen reports that indicated the donated amount by the donor’s name. Being a donor, I felt uncomfortable with that so I figure others would be uncomfortable too.
The smarter way to present the donor list and the amounts is to put donors in sections. For example, you may say donor who gave between $500 and $1000. That way you don’t show the actual amount.
Lastly, The year end report is a very important document. You have to show consistency in every way. Being transparent is the number one goal and everything else follows. Another important thing to remember is that if you spend a lot of time preparing the year end report, then your efforts must show in the way you present it.
The report must be branded to make sure that it’s easily recognizable. You don’t want to change the theme year after year. It’s ok to change some elements but keep the overall feel the same. This calls for a well thought out design. Use good quality images and readable fonts. Sometimes you have to pay a graphic designer to design the report for you. The presentation is everything. You want your donors to show off this document to others and that’s how you get more donors.
Let me know what kind of information you put in your report or if I have missed out some important information. I’d also like to take a look at some of your reports, so please send me a copy and I will personally read it and give you feedback.
Here are some resources you might need for your reports