How to Communicate Annual Report Data: Telling the Story Behind the Numbers (with Examples)

Wednesday, March 1, 2023

Like any organization, nonprofits are responsible for keeping track of and communicating a few key metrics of any given year. And while most nonprofits know they’re required to share this information through their form 990, not all take the time and effort to turn those numbers into a fundraising tool. Namely, their annual report.

What is a nonprofit annual report?

A nonprofit annual report is a detailed summary of an organization’s accomplishments and progresses over the course of a year. Unlike form 990, which is required of most nonprofits, an annual report is an optional document created by nonprofits to create a connection with their communities.

While 990s usually include factual information only, annual reports are packed with stories of impact, testimonials, and compelling visual elements. Great reports entertain and engage readers, and even turn them into donors.

Mainly, annual reports serve to:

• Create trust and transparency with their communities
• Inspire action (donations, volunteerism, etc.)
• Celebrate accomplishments and progress
• Express gratitude
• Set goals for the upcoming year

In essence, an annual report takes otherwise bland data—like revenue and expense—and creates a compelling story.

What most nonprofits get wrong about annual reporting

While annual reports aren’t required, they are standard in the industry. Most nonprofits, if not all, dedicate time and resources to creating one every year and sharing it with stakeholders.

However, though annual reports are standard, not all reporting is the same. Many nonprofits, unfortunately, make a few crucial mistakes when putting together their reports.

The biggest mistake nonprofits make is that they don’t see their report as an opportunity for engagement.

Most nonprofits create their annual reports out of duty. They create their yearly review with minimal effort, in order to check it off of their to-do lists. However, an annual report has the potential to be one of the most essential marketing tools for a nonprofit. It can help recruit supporters and more donations than ever.

And when nonprofits don’t view the annual report as a great opportunity for engagement, they fail to communicate the story behind their findings.

A lot of nonprofits use the data from their 990 forms in their annual reports. But, they do so without using proper storytelling techniques. Instead of providing context for their findings, and adding visual components, they list their revenue and expenses in listicle format. Or, within a paragraph of dense text.

When nonprofits don’t communicate the story behind their numbers—the who, what, where, how, and why—they lose reader interest. This leaves supporters feeling confused, untrusting of your mission, and uninterested in contributing. When a reader’s interest is lost, so is their support of your mission.

Why should nonprofits tell the story behind data?

So what do we really mean when we say that an annual report has the potential to be a great marketing and fundraising tool?

Annual reports reinforce brand identity

There are lots of nonprofits vying for donors’ attention—many with similar missions and values. So how can nonprofits stand out in a crowded marketplace?

An annual report, if designed well, is a great tool for reinforcing brand identity. Images of staff, beneficiaries, and more—all designed with brand colors and fonts—can help remind readers of who you are and why your mission matters. In a crowded marketplace, this kind of reinforcement is essential.

Annual reports create trust

Most nonprofits know that trust is one of the most important barriers to giving.

When supporters trust your mission and your operations, they’re more likely to give. Weary of scam nonprofits and unethical practices, stakeholders are inclined to support organizations that are clear and communicative about their accomplishments.

Annual reports build relationships

The nonprofit industry is all about building relationships. Donor stewardship, fundraising, and even marketing tactics involve creating a bond between a stakeholder and your organization.

An annual report, full of gratitude, evidence of impact, and emotional content, has the power to build long-lasting relationships.

Improves retention and recruitment

All of these benefits of storytelling help improve stakeholder recruitment and retention. Whether those stakeholders are partners, volunteers, or donors, a robust annual report can bring new faces in and keep them—making a nonprofit organization stronger and more resilient than ever.

Above all, storytelling makes your data a tool for emotional connection. Instead of just reading a string of numbers, your nonprofit’s story behind its finding has the ability to inspire readers and encourage them to support your mission.

How to tell the story behind the numbers

As previously mentioned, storytelling is all about identifying the who, what, where, why, and when. Like writing a novel, nonprofits should paint a clear picture of the context around their findings—namely, their quantitative data.

Most nonprofits include a few data points in their annual report:

• Revenue
• Expenses
• Program success/impact measurements
• Future forecasts

In order to tell the story behind these numbers, you’ll first need to identify the main components.

The who

When analyzing each data set, consider the “who” behind the numbers. In the case of nonprofit storytelling, there are a few “whos” to consider.

• Which stakeholders will be interested in these numbers? (i.e. who is our audience? And why?)
• Who do these numbers represent? (Do they represent the number of beneficiaries we’ve helped? Our staff? Our partners?)

The what

A key part of telling the story behind your numbers is providing enough context for stakeholders. Readers should feel confident in understanding the purpose of your findings—or what they mean. When compiling your data, consider these questions:

• What does this data mean to our supporters?
• What does it say about our mission and values?
• What is the purpose of sharing these data points?
• What does it accomplish?
• What do stakeholders need to know in order to understand these data sets?
• What parts of this data will resonate with our readers the most?

The where

Like any great novel or story, it’s important for nonprofits to describe the where. In this context, this might mean considering answering questions like:

For expenses:

• Where did we funnel this money?
• Where did it make the most impact?
• How does this data impact where we’ll be in the future?

For revenue:

• Where did we make the most money?
• Where did we allocate that money?
• How does this data impact where we’ll be in the future?

The when

Timing is everything. When relaying crucial data to your stakeholders, be sure to be clear about when major milestones occurred. Consider questions like:

• When did we see the most growth in our revenue?
• When did we have the most expenses?
• When in the future do we anticipate change to our metrics?
• When did our most successful initiatives take place?

The why

When sharing anything about your organization—within your annual report or not—it's important to consider the why behind any action. Successful nonprofits are clear about the purpose and intention behind their actions.

Consider questions like:

• Why do we think it’s important to share this information with stakeholders?
• Why will they care?
• Why did we allocate resources the way we did?
• Why does this matter?

Once you’ve decided the who, what, where, when, and why behind your numbers, it’s time to communicate that information.

Putting it all together: creating your annual report

As mentioned before, it’s not enough to simply list data points in your annual report. In order to connect with readers—and turn them into donors—you’ll need to use data visualization. Data visualization, or visual storytelling, is one of the best ways to communicate your data.

By using nonprofit-first tools like Yearly, you can build an award-winning report with expert visual storytelling techniques including:

Infographics

Charts

Timelines

Data visualization allows your nonprofit to create a holistic picture of your findings—and engage readers like never before.

Wrapping it up

When it comes to the success of a nonprofit organization, storytelling is everything. Nonprofits that don’t prioritize connecting and inspiring readers through the story behind their data are often missing out on potential partners, donors, and even volunteers.

To create an award-winning annual report for your nonprofit, check out Yearly’s free 14-day trial —the first-ever digital report builder for nonprofits.

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