A nonprofit annual report is a key communication and accountability tool that summarizes an organization’s mission, activities, and financial performance over the past year. While public-facing annual reports are not always legally required, they are considered best practice—especially for nonprofits seeking to build trust with donors, grantmakers, and the public.
So, what exactly should be included in a nonprofit annual report? While the content may vary depending on the organization’s size, structure, and audience, several core elements are typically expected:
1. Mission Statement and Overview
The report should begin with a clear statement of the nonprofit’s mission and purpose. This section often includes an overview of the organization’s history, goals, and values. It sets the stage for understanding the work being done.
2. Program Highlights and Impact
A central section of the report should focus on the organization’s major programs and accomplishments over the past year. Use data, testimonials, and stories to demonstrate outcomes and community impact. Funders and stakeholders want to see measurable results tied to the organization’s mission.
3. Financial Information
Transparency in financial reporting is essential. At a minimum, include a summary of revenues, expenses, and assets. Larger nonprofits often include audited financial statements, while smaller organizations may provide unaudited summaries or simplified financial reports. Key financial charts or infographics can make this section more accessible to non-financial readers.
4. Governance and Leadership
List current board members, executive leadership, and key staff. This provides transparency around who is responsible for the organization’s direction and decision-making. Some nonprofits also include a message from the board chair or executive director.
5. Acknowledgment of Supporters
While optional, many nonprofits use the annual report to recognize major donors, partners, and volunteers. This shows appreciation and encourages continued support. Be sure to follow donor preferences regarding anonymity when publishing names.
6. Future Goals
A strong report not only reflects on past performance but also outlines strategic goals and challenges for the upcoming year. This positions the organization as forward-thinking and committed to continuous improvement.
Nonprofit Annual Report Checklist Matters
Though not legally required, a well-structured nonprofit annual report can enhance transparency, strengthen stakeholder relationships, and support fundraising efforts. Including the right mix of narrative, data, and financials ensures your report is both informative and impactful. Dimov Tax presents expert assistance. Reach out to us today for professional support.