Why publish an annual report?

While most non-profit organisations (NGOs) and non-profit companies (NPCs) spend little on publications, either because they are cash-strapped or want to maximise spending on their beneficiaries, the one substantial publication they are likely to produce is the annual report (a legal requirement for NGOs in terms of sections 18 and 19 of the Nonprofit Organisations’ Act).

An annual report can be so much more than a vehicle for presenting annual financial statements or introducing changes to boards and management.

Ten benefits of a properly presented annual report

1. Advocate the cause. A recent survey of 224 US donors by the organisation Root Cause (www.rootcause.org), showed that most donors (69%) gave to a cause that they had knowledge about and were more likely to make a first donation to an organisation based on the cause rather than knowledge of the organisation requesting funding. The study found that donors want information about the cause and easy access to an NGO’s results (i.e. proof of the success of organisation’s activities).

2. Say thank you. Annual reports allow organisations to acknowledge the work and contributions of staff, board members and volunteers.

3. Give donors assurance of legitimacy. Your annual report provides assurance by showing information about your financial position (i.e. that you are a ‘going concern’), leadership and governance, physical location and activities.

4. Demonstrate transparency. Strong transparency is indicated in the annual report through the vision and mission statements, governance reports, financial disclosure and declaration of membership and management.

5. Assure donors of credibility. Annual reports can be used to advocate your cause, showcase your track record of successes, explain your challenges and demonstrate alignment with targeted funders’ criteria.

6. Mirror corporate responsibility. The King Commission on Corporate Governance third report (King III, 2009) is the governance standard for corporate donors. Your annual report can showcase your organisation’s ethical culture and application of King III, which is all the more credible for being voluntary.

7. Showcase the donor. Your annual report can assist your donor to showcase its corporate social responsibility to your stakeholders. Your donor will appreciate this as ad spend.

8. Synergise media. Once copy and images have been sourced for the annual report, they can be economically ‘recycled’ in other media, such as the organisation’s website and social media pages, as well as used in funding proposals and as a comprehensive ‘takeaway’ for VIP guests and potential donors.

9. Market your brand. Electronic copies can be tailored and distributed cheaply to stakeholders, peer organisations, potential partners and volunteers and can help to position your organisation as an important player and leading ‘brand’ in your sector.

10. Protect intellectual property. Annual reports help to preserve institutional knowledge and act as a useful record of work.

While they’re time-consuming to produce, and require consultation and contributions across the organisation, the benefits of a visually appealing, clear and concise annual report far outweigh the costs.