How to Use Annual Reports as a Donor Stewardship Tool
- Nonprofit Learning Lab
- 1 day ago
- 5 min read
This is a guest blog.
Donor stewardship directly relates to donor retention. With the right stewardship tools, your nonprofit can engage supporters, strengthen your community, and encourage donors to make repeat donations.
One such tool is a well-crafted annual report that summarizes your organization’s key achievements and positions donors as the driving force behind your work. Your annual report can foster genuine and long-lasting relationships with donors by demonstrating the importance of their involvement.
In this guide, we’ll explain how your nonprofit can turn this year’s annual report into an effective donor stewardship tool.
1. Design Your Annual Report for Engagement
In any communication strategy, cultivating relationships with donors requires thoughtful messaging. Your nonprofit might leverage donor management software to craft personalized emails or use social media engagement metrics to determine which content resonates most with your audience. Your annual report should take a similar approach.
Certain elements are more likely to nurture deep engagement with your audience than others. When piecing together your annual report, here are a few elements you should focus on:
Impact Stories
Sprinkle your annual report with inspiring stories that attest to your nonprofit’s critical work. These stories should represent all those involved in your organization: donors, volunteers, beneficiaries, and other community members who play a role in your mission.
For example, let’s say a donor, Jane Smith, gave a memorial gift in honor of her uncle, who was passionate about your nonprofit’s mission to rescue neglected and abused animals in the community. Jane’s gift of $1,000 allowed your team to save a litter of puppies from an unsafe living environment, nurture them back to health, and find loving homes for each of them.
With Jane’s permission, you might dedicate a section of your annual report to telling her story. Include a photo of Jane and her uncle alongside images of the rescued puppies with their new families. Directly quote Jane and the volunteers involved in your nonprofit’s rescue and adoption efforts, using data and numbers to quantify their experiences.
While you should avoid making your annual report feel like another request for donations, you can still incorporate subtle calls to action. End your story on a hopeful note, hinting that your nonprofit has plans to scale its programs or expand its reach so more beneficiaries can have experiences like this one.
Donor Recognition
You likely can’t fit every donor’s name in your annual report, but calling out major contributors while mentioning the importance of all levels of support can show appropriate recognition. Your approach will depend on your nonprofit’s unique supporter base, but here are a few considerations to keep in mind:
Format. Who will you mention in your annual report, and how will you organize this information? For example, you might create sections for different funding sources, such as individual donors, corporate sponsors, and foundations, or various initiatives throughout the year, such as major events, projects, and programs.
Contribution. Remember to emphasize the impact of each contribution, not the amount. For instance, you might explain how a foundation grant enabled your organization to lead a children’s book club that increased literacy and fostered a love of reading.
Humanization. Most annual reports include brief introductory comments from the nonprofit’s leadership, but donor recognition should also include messages of gratitude from real people. This content helps readers feel noticed and appreciated instead of simply lumped into a generic report.
Conclude your recognition section with a message for all donors to reinforce the impact of every donation. Even a brief statement like, “Every donation, no matter the size, pushes our organization closer to furthering our mission,” can make one-time donors feel appreciated and compelled to deepen their involvement.
Transparent Financial Data
Present your nonprofit’s financial activities in an easily digestible format so donors can understand how your organization used their contributions. Use visuals, like charts and infographics, to break this data down into skimmable graphics and provide further context to enhance readers’ understanding. For example, you might quickly explain the difference between restricted and unrestricted funds.
Additionally, attach financial statements as appendices to your annual report so supporters who want to learn more can easily dig deeper. These statements provide an unfiltered view of your organization’s financial activities and increase transparency with donors.
2. Thoughtfully Distribute The Report
Once you’ve finished designing your annual report, make the document easy to access and share. Mobile-friendly formats, like PDFs or web-based reports, enable donors to navigate the content from numerous devices and share it with their networks.
While your annual report should be accessible to broad audiences, your top supporters deserve a personal touch. Send the report directly to your major donors, committed volunteers, and other loyal supporters. Add a personalized enclosure, such as:
A handwritten note from a board member detailing the impact of the donor’s gift
Behind-the-scenes images of your nonprofit’s staff and facilities with a handwritten thank-you note
A photo of a beneficiary who directly benefited from the supporter’s contribution
A bookmark displaying your nonprofit’s mission
Appreciation messages written by beneficiaries
Use what you know about your audience’s preferences to further personalize your outreach. For example, send the report via email to donors who prefer digital communication and a physical copy with enticing packaging to those who prefer direct mail.
3. Measure The Response and Adjust Accordingly
According to Bloomerang’s donor stewardship guide, showing donors that you value their input is a surefire way to increase their loyalty. Ask for donors’ feedback on your annual report. Did they find it engaging and informative? Did it answer all of their questions about your nonprofit’s activities?
Depending on how you distribute the report, you can also track platform-specific metrics such as:
Page visits and downloads. If you create a landing page dedicated to your annual report, track how many visitors and downloads it receives. This data can also provide insights into your website’s accessibility by showing how easy or difficult it is for people to find and interact with your report.
Email open rates. Track how many annual report emails supporters opened. This metric may help you identify effective email subject lines or language you could improve to pique recipients’ interest.
Link clicks. Evaluate your marketing materials’ effectiveness by measuring whether people follow the links to your annual report. For example, if you provide the link to your annual report on a social media post, you can track whether followers actually clicked the link or simply scrolled past the post.
Use these insights to improve future stewardship materials and plan ahead for your next annual report. Keep a running list of notes and feedback to revisit as you build future reports, and thank donors who provided their feedback to reassure them that you’re taking it into consideration.
Donor stewardship isn’t simply a tactic to raise more. It’s a dedicated practice to building deeper relationships with your supporters. Incorporate your annual report into your stewardship efforts, but commit to constantly revitalizing your approach for creative and personalized interactions with future supporters.