Why Your Nonprofit Needs an Annual Impact Report

Have you ever wondered how you could share your story with your supporters, highlight your organization’s successes, or present your impact data in an easy-to-read format? That’s the purpose of a nonprofit annual report. 

The report – a compilation of your accomplishments, community, and mission – is necessary for nonprofit organizations. It’s a reminder of your supporters’ impact and connection to the cause and should serve to inspire ongoing and new support.

A good annual impact report will share how your donors' contributions made a difference in achieving your mission and include data regarding your organization’s financial reports, such as the amount donated, how it was used, and even the exact community it benefitted.

Ultimately, your nonprofit should promote transparency and community, encouraging new donors to join the community and recurring donors to stick around for another year.

The Differences Between an Impact Report and an Annual Report

An annual report is a comprehensive document that provides an overview of your organization’s financial performance and activities over the past year. It typically includes financial statements, a letter from the CEO or chairman, and information about the company's operations, achievements, and future plans. Annual reports are primarily shared with your shareholders, investors, and other stakeholders.

In contrast, an impact report focuses on your organization's social, environmental, or economic impact. It demonstrates how the organization's activities have made a difference in the community or the world at large. Impact reports are published more commonly among non-profit organizations, foundations, and socially responsible businesses. They may be published annually, quarterly, or as needed for current projects.

Both reports are dedicated to sharing data, but emphasize a different type of data. For nonprofit organizations, your annual impact report is an opportunity to combine both aspects and provide a full view of your organization’s financial performance and social or environmental impact.

When Should You Prepare an Impact Report?

Impact reporting works best when done as you go rather than at the end of the year. You can gather data as you complete projects, after events, and after milestones. This data will be featured in your annual impact report. 

Your actual impact report should be done annually, as the name suggests, and typically coincides with your nonprofit fiscal year-end (when you file your Form 990). You can opt to send a report quarterly, after a milestone, or as you close an initiative or program, but these reports focus solely on the time period and program in question – an annual impact report contains all programs and milestones over the year.

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When Should You Invest in an Annual Impact Report?

It’s not uncommon to DIY your annual impact report, but when should you invest in professional design? While there is no precise moment, you may be ready when you’re struggling to appeal to new donors, you want to create more clarity when sharing your complex programs and data, or you lack the time and resources to make your own.

A professional annual impact report will tell your story in a way that everyone will listen, and seeing if it’s the right option for your organization is as simple as booking a call.

What to Include in Your Nonprofit Annual Impact Report

You can include anything in your nonprofit impact report, but just because you can include anything doesn’t mean you should. Here are a few things to consider adding to your annual impact report:

• Annual Theme
• Mission Statement
• Financial Statement
• Impact Stories
• Major Accomplishments
• Impact Data
• Community Partners
• Donor List
• Fundraising Information
• And more!

Most organizations will have the same data, but if you have complex concepts to explain or data to present, your impact report may look different than others. Consider looking at these annual report examples from different organizations and go from there!

You can learn more about what to include in your nonprofit annual report in our annual report checklist here.

Where to Publish and Share Your Impact Report

Nonprofit annual impact reports are not meant to be official financial documents to be submitted to places like the IRS. It’s used to show your organization’s accomplishments and garner support and should be shared with your donors, community partners, and constituents. 

Additionally, you should have your nonprofit annual impact report readily available and accessible on your website for potential donors and community members to review, along with being back-linked – and potentially permanently included – in your email newsletter and org member’s email signature.

Your annual impact report can also be condensed into a postcard or brochure featuring the most important points of your impact data.

You’re not limited in what you can do (or not do) with your annual report. With online publications rising, your digital annual report could be a powerful tool for increasing publicity for your nonprofit. 

If you’re ready to create your best-ever nonprofit annual impact report, explore our nonprofit graphic design services and book a no-pressure call to discuss your project.