Analyzing your nonprofit’s financial health is essential for the sustainability of your organization. If your organization uses a nonprofit accountant that regularly maintains transaction activity throughout the year, you will be prepared for closing the books and have a smoother audit. Here are four best practices to be prepared for your year-end reporting.
Make an Annual Report Plan for Your Nonprofit
Ensuring your annual report has a clear message and knowing who your audience will be will make for a successful report. Your audience consists of donors, corporate sponsors and foundations. Your goal is to prove their money went to fulfilling your mission. Create 4-5 themes for the report that will highlight successful programs, activities and fundraising campaigns. Consider interviewing your supporters to get feedback on their experience with your nonprofit. Gather all your financial statements.
You also need to make sure the report covers four key elements:
- Shows a clear mission and focus
- Lists all projects
- Accounts for all contributions
- Contains financial statements
Something to consider is portraying your financials using infographics. These can be easier to read and will visually engage your audience.
Recognize Donor Accomplishments
Donors will be more likely to read your report if you make them the focus. Past donors will strongly consider donating to your organization again if you show them how their donation impacted certain projects, helped motivate volunteers, and created new projects.
Highlight volunteers and other donors in the report. Potential donors will then see that others are passionate about your mission.
Spotlight Major Contributors
Most annual nonprofit reports only list donor names. While this is great and should happen, highlighting the major contributors takes your report one step further. It captivates the audience, shows appreciation for the donors who went above and beyond, and offers ways that smaller donors might be able to step-up their contributions – and not necessarily by giving more money.
One of your major contributors could be the group that volunteers their time during the year. Requesting their testimonials and including a photo showcasing how their volunteer efforts supported your mission allows prospective donors to see how valuable they could become to your organization.
Have a “Call to Action”
The most impactful annual reports end with a call to action. While you are presenting the highlights of the past year, you are also convincing people to give again or to give for the first time. Make sure you have a section detailing the many different ways someone can support your nonprofit. This can be done by emphasizing online fundraising campaigns, gift matching, volunteer opportunities, etc.
Consider putting your website front and center on each page of your annual report to help drive people to visit.
Numbers 4 Nonprofits offers several services that will have you ready for preparing your annual report, including preparing for the external audit and evaluating internal controls. We are focused on managing your money with mission.