Annual reports from nonprofit organizations make me sad.

They make me sad because I know from personal experience how hard it is to produce, every 12 months, a distinctive publication that “tells your story” – a publication that is not just a pretty wrapping for your financial statements, but is something that will turn a disinterested observer into a supporter, a supporter into a major donor, and a foundation into a sponsor-for-life. And they make me sad because I have never once read any of the many thick, glossy annual reports that arrive in the mail. These are documents into which executive directors, their staff, writers, and designers have poured sweat and treasure, and they sit, unopened, in my inbox until I decide it’s recycling day. That is sad.

In a recent conversation with an executive director of one of the research organizations we support, I mentioned that I think the benefit/cost ratio for annual reports is pretty unfavorable. They are more trouble than they’re worth. I don’t think it’s an understatement to say she was shocked. She said that her fundraising consultant had told her they were essential, so her team labored over them for months, trying to show the breadth and depth of their work in a slim, attractive, and readable volume.

I asked her why they produced annual reports. “We have to do it to reach donors.” I asked how many years they’d been producing annual reports. “Forever – longer than I’ve been here.” And I asked her how many times during her tenure a new or current donor had referred to something in an annual report, or otherwise provided evidence that they’d even cracked one open. “Not once.” Hmmm. Seems like a researcher might start to get curious about why the data isn’t lining up with the theory.

Maybe that organization is an oddity, and maybe I’m not typical. Perhaps other program staff here and at other foundations, along with high-net-worth individuals, pour over annual reports for interesting nuggets or for information that helps them make decisions about grants or gifts. But I doubt it.

My plea to nonprofit leaders, whenever I can get anyone to listen:

  1. Drop the ritual “we do it because it’s the time of year to do it” publication, and reallocate the time to targeted, strategic fundraising efforts. Days (weeks!) of time can be liberated for far more effective actions like personal communications with existing funders, outreach to potential new ones – or maybe postcards to special friends, each carrying one compelling story, one evocative photo, sent out to correspond to key moments for individual giving.
  2. Invest whatever writing and design energy you have in a website and social media that carry a distinctive brand, voice, and up-to-date content, and don’t forget about making it all show up in search results. It’s 2018. People do not form their views about an organization based on self-generated pamphlets delivered by the U.S. Postal Service.(Examples of great nonprofit websites for organizations like many that we support can be found here.) Make sure your website is optimized for mobile since we are all addicted to our pocket screens these days.
  3. If you cannot imagine kicking the annual report habit, look for ways to dramatically decrease the costs. On Think Tanks, for instance, created a report out of curated essays that had been produced for other purposes, and published online. Substance on a budget. Or tell the whole story in the form of a photo essay to convey a sense of what you do and how, without all the pain of writing up a coherent narrative. Feel free to use wonderful free photo resources.
  4. If all of these ideas still seem too radical, at least do one survey to figure out if you’re reaching the imagined “multiple audiences.” Surely that would provide some information to hone the annual report craft, if not to sink it. Your current foundation supporters might even be able to provide funding to do the survey, since it could contribute so much to your overall communications effort.

In short, I offer a New Year’s resolution for 2019, a few months early: Don’t waste time and effort on annual reports that no one will read.