As a nonprofit leader, one of your goals is to motivate your donors to support your nonprofit’s mission. An excellent means of doing that is sharing the impact their donations had on the nonprofit’s clients over the past year. Let’s take a closer look at just how important the impact report is and what you can do to make it a must read.
You are preparing your fundraising plan for the year ahead. You know successful fundraising is based on asking stakeholders to donate to your nonprofit for the upcoming year and getting a positive response from them. There are many ways to ensure that positive response – offering a range of fundraising events, communicating regularly via a variety of media channels, gathering insights from your donor database management system, and acting on them, developing compelling communications that express impact and need. The most successful fundraising plan is the one that can express the most compelling need and impact. After all, who doesn’t want to be a part of changing lives for the better!
Success comes from documenting and sharing the compelling need of the clients you serve, how your nonprofit has changed their lives and how it plans to do so in the future with continued support from your donors, both new and returning. One way is to publish a report at the end of each fiscal year that documents your nonprofit’s many accomplishments to include impact. You want the report to be inspiring and motivating. The impact report should move the reader to action – volunteering, donating, and promoting your mission.
Let’s take a moment to discuss impact and annual reports. Annual reports have been used by nonprofits for decades to highlight a nonprofit’s mission and impact, thank volunteers and supporters, and make a case for donating to the organization. (www.councilofnonprofits.org). The impact has been included as part of the annual report. Charity Watch, Executive Director, Laurie Styron (charitywatch.org) shares that annual reports are being rebranded as impact reports in her Aug 17, 2022, message. Whether you choose to publish an annual or impact report, the goal should be the same: motivate your stakeholders!
The impact report needs to be concise and professional. Concise because you want stakeholders to read it and no one wants to read through 20+ pages of words, at least not in today’s world. Professional because you will be sending this document out to the community, and you and your stakeholders want to make a good impression. This is a document you want others to share proudly and widely.
The National Council of Nonprofits recommends you use the impact report to underscore your nonprofit’s commitment to transparency, and explain your organization’s mission, progress, and outcomes. Consider including a vision of what lies ahead (a letter from the Board of Directors is a powerful way to do this). Impact reports feature photos and financial reports (illustrating the nonprofit’s revenue and expenses) and acknowledge contributors. These reports are an opportunity to be candid and transparent about your nonprofit’s finances and outcomes and build trust with your audience. You don’t have to paint a picture that is all roses; be honest if you faced challenges or barriers and consider sharing them. No nonprofit is without them, and you will be more real for having shared them. These may be excellent topics to share in subsequent years as having been overcome.
But wait, there is more to the story.
The impact report is important to your donors, but it is also important to your many other stakeholders:
- Staff – It is motivating for them to have the opportunity to see all their challenges and sacrifices rewarded with a look back at their accomplishments.
- Community partners – The impact report is shared with hundreds to thousands of people across the community, and a top-notch impact report will recognize its community partners who love the promotion of their giving.
- Volunteers – Just like your staff, volunteers want to see how their time and energy has paid off for the mission. Most likely they will be sharing the impact with their family and friends (think future donors/volunteers).
- Clients – Giving voice to your clients through their stories, testimonies, and pictures is empowering and encourages them on their journey.
- Funding agencies – Many funding agencies will require an impact report as a grant application attachment. Others will allow you to submit other attachments you think most enlightening to their decision. The impact report is a concise way to let them know how well you have done in the past.
- Board of Directors – Your Board should review the impact reports not only for the past year’s accomplishments but also for what has been accomplished over the longer term to give them insight into what needs to be done in the years ahead.
Thinking about what other questions you might have regarding impact reports:
- Attach your year-end impact report to an email sent out to all your stakeholders (time it to coincide with a major fundraiser or annual appeal).
- Send it with your email introducing your nonprofit to new stakeholders. If your impact report is presented as a button in the body of the email, you can drive new stakeholders to your website to learn more about your organization. The landing page for your impact report can also include a call to action for readers to support the impact by making a donation.
- Print a few dozen high quality paper copies in color to share with major donors.
- Don’t wait until the year is over to begin writing your impact report. Gather pictures and stories throughout the year.
- Put your measurement tools in place at the beginning of the fiscal year to report quantitative outcomes for each of your programs at year’s end.
- Upload your annual report on Candid (GuideStar) to increase your level of transparency. This is a go-to website for your donors who want to know more about your nonprofit.
- Think about a theme for your report and tie it to your overall fundraising plan.
- Post it on your website and share a link to it on your social media accounts.
Whether you call it an impact report or annual report or make your impact report a subset of your annual report is irrelevant. What is paramount is that you measure, report, and share the impact over the past year with your nonprofit stakeholders. Make the message of impact and need compelling by sharing facts, stories, and pictures with transparency and conciseness.
