How to Create a Nonprofit Annual Report for Your Organization

Key takeaways

• This public-facing annual report is distinct from the annual report you may be required to file with your Secretary of State. It’s also separate from the Internal Revenue Service’s (IRS) required annual report (Form 990), which tax-exempt organizations must file based on their size and revenue.
• Public-facing annual reports aren't always legally required for nonprofits, but they help build donor trust, demonstrate transparency, and showcase the organization's impact on stakeholders.
• Essential sections include your mission statement, key accomplishments, financial transparency, donor recognition, and clear calls to action for future support.
• Digital annual report formats combined with creative storytelling can maximize impact even with limited resources. This allows small nonprofits to compete with larger organizations.
• Strategic distribution and content repurposing (adapting existing content for a new purpose) can transform your annual report into a year-round engagement tool that drives donations and volunteer recruitment.

What is a nonprofit annual report, and why does it matter?

A nonprofit’s public annual report is a comprehensive document that provides stakeholders with a detailed overview of your organization's mission, activities, accomplishments, and financial performance over the previous fiscal year.

Unlike mandatory IRS annual returns or filings that might be required in your state, public-facing annual reports are voluntary. Nonprofits publish them to communicate their impact to potential donors, grant-making foundations, corporate sponsors, volunteers, board members, community leaders, and the general public through storytelling, data visualization, and transparent financial reporting.

A compelling annual report can have several benefits:

• Demonstrates accountability to current supporters
• Attracts potential new donors by showcasing your impact
• Provides board members with comprehensive performance data
• Establishes your organization's credibility within the broader nonprofit sector

Should your nonprofit file an annual report?

While your organization must file specific tax documents to maintain its 501(c)(3) status, creating a public-facing annual report is entirely optional. However, it's highly recommended for building stakeholder relationships and organizational credibility.

Required IRS annual filings

Every tax-exempt nonprofit must file annual returns (Form 990) with the IRS to maintain its status, but these requirements vary based on your organization's size and revenue.

There are three types of annual returns depending on the size of your organization.

• Form 990: For organizations with gross receipts exceeding $200,000 or total assets worth more than $500,000
• Form 990-EZ: For smaller nonprofits with gross receipts between $50,000 and $200,000
• Form 990-N (the e-Postcard): For the smallest organizations with gross receipts of $50,000 or less

These IRS forms become public records approximately 12–18 months after filing, but are primarily designed for regulatory compliance rather than donor engagement. The language is technical, the format is standardized, and the content focuses on legal requirements rather than storytelling or impact demonstration.

Why voluntary annual reports matter

Organizations that publish annual reports report improved donor relationships, increased transparency and credibility, and enhanced ability to attract new supporters and partnerships. Creating an annual report also forces organizational reflection and strategic planning.

By compiling accomplishments, analyzing financial data, and articulating future goals, nonprofits can also gain valuable insights on how to better structure and run their organization. Many nonprofits discover that the annual report creation process itself strengthens internal communication and organizational focus.

Key sections of a nonprofit annual report

Effective nonprofit annual reports should flow logically from your mission and values through specific accomplishments to future goals, creating a narrative arc that engages readers and motivates continued support.

According to BoardSource research, donors spend an average of 3–5 minutes reviewing annual reports. For this reason, clear organization and visual appeal are also crucial to maintain reader engagement throughout the document.

Mission statement and organizational overview

This section typically includes your founding date, primary service areas, and core values. Many organizations enhance this section with a letter from the executive director or board chair to provide a personal perspective on the year's achievements and challenges.

Consider including graphics of key statistics, such as how long you've been operating, communities you've served, or cumulative impact numbers that demonstrate your established track record. Quick statistics help readers understand your organization's scope and credibility before diving into specific program details.

Program accomplishments and impact metrics

The accomplishments section forms the heart of your annual report and should highlight three to five major program areas or initiatives. For each area, include specific metrics that demonstrate impact, such as the number of people served, problems solved, or outcomes achieved. You don't want to overwhelm readers with excessive statistics; just focus on the most compelling and easily understood measures of success.

Brief client stories or testimonials can also strengthen this section and illustrate the human impact behind your numbers. Even a single compelling story about how your organization changed someone's life often resonates more powerfully than pages of statistics. Include photos, when possible, to reflect the diversity of your client base. But make sure you have documented permissions.

Financial transparency and stewardship

Financial reporting in annual reports should be accessible to non-accountants. Include a summary of total revenues and expenses. Pie charts or bar graphs can help create an easy-to-follow visual of funding sources and expense categories. Most readers want to understand what percentage of donations goes directly to programs versus administrative costs.

Provide brief explanations of any significant changes in the past year that differ from previous years. If your organization underwent financial challenges, address them honestly while explaining what steps you've taken to ensure sustainability. Transparency about both successes and challenges builds long-term credibility with stakeholders.

Donor and volunteer recognition

Recognition sections serve two purposes:

1. They thank current supporters
2. They demonstrate community backing to potential new donors

You can list major financial contributors by giving level. Many organizations create categories such as "Founding Partners," "Champion Circle," or "Community Supporters" that recognize different contribution levels without publishing specific amounts. Again, make sure you have permission to publish names publicly.

Don't overlook volunteer recognition, as these individuals often become financial donors and serve as powerful ambassadors for your cause. Consider including volunteer hours contributed, special achievements, or quotes from volunteers about their experience with your organization.

When appropriate, list board members with their professional affiliations to demonstrate the organization's credibility and build community connections.

How to create a nonprofit annual report: Step-by-step guide

The key to managing a project of this scale is to break it into manageable phases with clear deadlines and assigned responsibilities. Organizations that establish annual report committees or designate specific staff members to coordinate the process typically produce higher-quality results with less stress and better adherence to timelines.

Step 1: Define your annual report objectives and audience

Begin by establishing clear objectives for your annual report. Consider whether your primary goals include donor retention, new donor acquisition, volunteer recruitment, community awareness, or board governance support. Different objectives often require different content emphasis, design approaches, and distribution strategies.

Identify your primary and secondary audiences, as this will influence your content depth, language complexity, and visual design choices. For example, a report targeting major donors might include more detailed financial analysis, while one aimed at community awareness might emphasize local impact stories and volunteer opportunities. 

Step 2: Gather and organize your data systematically

Data collection is one of the most time-intensive aspects of annual report creation, so start this process early and establish clear systems for organizing data. Create standardized templates for program managers to report their accomplishments. This helps to ensure consistency in how impact metrics are calculated and presented across different departments or initiatives.

For qualitative information (client testimonials, volunteer feedback, partner quotes), establish photo release protocols early in the year so you have compelling visual content available when you need it. Many organizations maintain ongoing "annual report files" throughout the year to capture achievements and stories as they occur.

Step 3: Craft your organization's compelling narrative

The goal is to transform your collected data into a cohesive story that demonstrates your organization's impact and future potential. To do so, identify overarching themes that connect different program areas or highlight significant organizational growth and development. Your narrative should acknowledge challenges honestly while emphasizing solutions, resilience, and continued commitment to your mission.

Use active voice and concrete language that makes your accomplishments accessible to readers with varying levels of familiarity with your work. Include forward-looking statements that help readers understand your organization's vision and strategic direction.

Step 4: Design for accessibility and engagement

An effective annual report design should enhance rather than overshadow your content. You want visual elements to improve readability and comprehension. Choose fonts, colors, and layouts that reflect your organization's brand while ensuring accessibility for readers with visual impairments. Consider both print and digital formats during the design phase, as layout requirements may differ.

Incorporate infographics, charts, and visual data that make complex information easily digestible. Use white space effectively to avoid overwhelming readers, and ensure that key information stands out through strategic use of headers, callout boxes, or highlighted quotes. Professional design doesn't require expensive agencies. In fact, many nonprofits create effective reports using templates from platforms like Canva or Adobe Creative Suite.

Step 5: Include essential legal and financial information

While annual reports aren't legally mandated, sharing certain financial and governance information can enhance credibility and demonstrate transparency. Provide summary financial information that shows revenue sources, expense categories, and net assets. Readers more easily comprehend these figures if you present them as percentages of the total budget.

Include your organization's tax-exempt status information, board of directors listing, and key staff members with their credentials when relevant. Some organizations include brief governance policies or ethical standards that demonstrate the organization's professionalism and accountability. Ensure all financial information aligns with the Form 990 you filed to maintain consistency across public documents.

Step 6: Choose your distribution strategy carefully

Plan your distribution approach based on data you have of your audience's preferences and your own available resources. Digital distribution through your website, email newsletters, and social media platforms is a cost-effective way to easily share your annual report online.

Consider creating multiple nonprofit annual report formats, such as a comprehensive PDF for detailed review and shorter summary versions for social media or email campaigns. Print distribution may be appropriate for major donors, board members, or community events where physical materials create stronger impressions. Many organizations use hybrid approaches, printing limited quantities for key stakeholders while relying primarily on digital distribution for broader audiences.

QR codes on printed materials can link readers to digital versions with additional content or interactive elements. Some organizations also offer video annual reports to help keep audiences engaged and breathe life into the statistics.

Step 7: Measure and maximize ongoing impact

To optimize the process for future reports, establish metrics for how to evaluate your annual report's effectiveness. This should go beyond simple distribution numbers:

• Track website traffic to report pages
• Note social media engagement with report content
• Look for increases in donations or volunteer inquiries following publication
• Survey key stakeholders about their impressions and suggestions for future improvements

The best way to measure ongoing impact is to repurpose content throughout the year. This helps to extend your annual report's value beyond its initial publication and maintain consistent messaging across all organizational communications. Extract key statistics, success stories, and photos to use in grant applications, social media posts, newsletter content, and donor communications year-round.

Examples of effective nonprofit annual reports

Studying successful annual reports from other organizations provides valuable insights into effective design, content organization, and storytelling techniques.

Large nonprofit organization example

The American Red Cross 2024 annual report effectively communicates complex operations across multiple program areas. Their report excels at using infographics to present disaster response statistics, blood donation numbers, and international aid distribution in easily digestible formats. They masterfully balance national scope with local impact stories, helping readers understand both organizational scale and community relevance.

Their financial reporting section uses clear pie charts and bar graphs to show funding sources and expense categories, with brief narrative explanations of any significant changes from previous years. The report also includes recognition sections for major donors, corporate partners, and volunteers to demonstrate the broad community support that enables their work. From a design perspective, strategic use of white space and professional photography creates a polished presentation that reflects the credibility of their organization.

Small nonprofit organization example

Foodbank of Southeastern Virginia and the Eastern Shore 2024 annual report

Local food banks often create compelling annual reports despite limited budgets by focusing on powerful storytelling and community connections. Successful examples typically feature client success stories with photos and quotes that illustrate the human impact of food assistance programs. These organizations excel at translating statistics into relatable terms—"provided 50,000 meals" becomes "fed 200 families for an entire month."

Small nonprofit reports often include volunteer spotlights and community partner recognition that demonstrate broad local support and engagement. Financial sections may be simpler than large organization reports, but maintain transparency by clearly showing what percentage of donations goes directly to food purchases versus operational costs. Many use local photography and design volunteers to create professional-looking reports that reflect community character and values.

Digital-first annual report example

National Park Foundation 2024 annual report

Forward-thinking nonprofits are creating interactive digital reports that engage readers through multimedia content and user-friendly navigation. These reports might include embedded videos of client testimonials, interactive maps showing service areas, or clickable infographics that provide additional detail on demand. Digital formats allow for real-time updates and easy sharing across social media platforms.

Successful digital reports maintain clear information hierarchy and fast loading times while incorporating engaging visual elements. They often include social sharing buttons for individual stories or statistics, which make it easy for supporters to amplify specific content. Many organizations create both comprehensive digital reports and shorter summary versions that are optimized for mobile viewing and social media distribution.

Leveraging your annual report for year-round engagement

Strategic content repurposing and ongoing distribution can transform your annual report into a year-round marketing asset that supports fundraising campaigns, volunteer recruitment, and community engagement throughout the entire year.

Content repurposing strategies

• Extract individual success stories, statistics, and photos from your annual report for use in monthly newsletters, social media campaigns, and donor communications throughout the year.
• Create a content calendar that strategically releases different report elements over 12 months, ensuring your annual achievements continue generating engagement and support long after publication.
• Transform key statistics into social media graphics, individual success stories into blog posts, and financial transparency information into donor stewardship communications.

Grant application and fundraising support

• Use annual report financial data, program statistics, and success stories to strengthen funding proposals throughout the year.
• Many grant makers specifically request annual reports as part of their application process, making a well-prepared report essential for accessing foundation and corporate funding opportunities.
• Keep digital copies easily accessible for quick distribution to potential funders and partners.

Donor stewardship and relationship building

• Send quarterly updates to major donors that reference annual report achievements while providing current program updates.
• Use success stories and photos from your annual report in thank-you communications that show donors the specific impact of their contributions.
• Create donor-specific communications that highlight the programs or initiatives most relevant to individual supporters' interests. 

Nonprofit annual report FAQs

What's the difference between Form 990 and an annual report?

Form 990 is a mandatory IRS filing that all tax-exempt nonprofits must submit to maintain their 501(c)(3) status. Public-facing annual reports are voluntary publications that nonprofits create to boost donor and community engagement.

Form 990 uses standardized government language and focuses on regulatory compliance. It becomes a public record 12–18 months after filing. Conversely, annual reports allow complete control over messaging, design, and content presentation while highlighting achievements and impact in accessible language that resonates with supporters and stakeholders.

How can small nonprofits create professional reports on a budget?

Small nonprofits can create effective annual reports on a budget via the following strategies:

• Focus on compelling content over expensive design.
• Use free or low-cost tools like Canva, Google Docs, or Adobe Creative Suite templates.
• Partner with local graphic design students, volunteer professionals, or board members with relevant skills to provide design assistance.
• Discuss an in-kind donation of design services from a local print shop or marketing agency.
• Prioritize authentic photography over stock images.
• Consider digital-only distribution to eliminate printing costs while reaching broader audiences through social media and email campaigns.

When should nonprofits publish their annual reports?

Most nonprofits publish annual reports 3–6 months after their fiscal year ends, allowing adequate time for financial audits, data compilation, and content creation. For example, organizations with calendar-year fiscal years typically publish reports between March and June. It's also helpful to consider your donor communication calendar and major fundraising events. Then, schedule your publication to align with those timelines.

What financial information should be included for transparency?

To maintain transparency, it's important to include the following financial information:

• Summary financial statements showing total revenues by source (donations, grants, earned income)
• Expenses by category (programs, administration, fundraising)
• Net assets or fund balances
• Any significant changes from the previous years
• Major capital expenditures or reserve fund policies

For easy comprehension, present information as both dollar amounts and percentages of the total budget. It's also critical to ensure all financial information aligns with your filed Form 990 to maintain consistency across public documents.

Are there free nonprofit annual report templates available?

Yes, numerous platforms provide free annual report templates specifically designed for nonprofits. The National Council of Nonprofits offers links to tools and examples, while platforms like Canva, Adobe Express, and Microsoft Office provide nonprofit-specific designs.

BoardSource and other nonprofit support organizations frequently share template resources and best practice guides. Many state nonprofit associations also provide template libraries and design resources for their members at no cost.

How long should a nonprofit annual report be?

The length of an annual report should match your audience's attention span and information needs rather than follow an arbitrary page count. Most effective reports range from 8–24 pages, with smaller organizations often creating successful 4–8 page reports that focus on essential information.

Digital reports can be longer since readers can easily navigate to the sections they're interested in, while printed reports should prioritize concise, high-impact content. Focus on quality storytelling and clear information presentation rather than meeting specific length requirements.

Roberta Codemo contributed to this article.