Creating a Better Annual Report

Tuesday, September 9, at 12 noon, U.S. Eastern time

Ken Grunke is director of individual and major giving at Pillars, a Chicago charity that provides mental-health services. Mr. Grunke has played a key role in overhauling his group's annual report so it includes more information for donors and is less expensive to produce.

Kivi Leroux Miller is a marketing consultant in Lexington, N.C., and the author of the book How to Write a Nonprofit Annual Report. As a consultant, she has written annual reports for many different types of nonprofits, from national advocacy organizations to small, community-based nonprofits.

A transcript of the chat follows.

Peter Panepento (Moderator):
    Hello and welcome to today's live discussion about annual reports. A growing number of nonprofit organizations are using new strategies and tools to change the way they deliver their annual reports to supporters. And some groups are scrapping their traditional formats and trying to present their reports in new ways.

Peter Panepento (Moderator):
    Should your organization consider these formats? What are some of best practices in annual reports? How can your group create more cost-effective reports? We have two experts on this topic on board for the next hour to answer these and other questions. As always, we invite you to submit your questions to our experts by clicking on the "ask a question" link on this page. We'll post the answer as soon as it's available.

Peter Panepento (Moderator):
    Ok. Let's get started ...

Ken Grunke:
    Good morning/afternoon everyone. Recently our organization took a radical approach to developing our annual report. We not only changed the size (22"X11" and folded in quarters), layout (empahsis on impact) and construction (recycled paper on low gloss, heavy stock), but also the format of our published donor list (online). As a result, we were able to produce a fairly succinct, complete, economical and multi-functional annual report that would bridge online viewing with a self mailer. The size of the piece was also as such so that we could fit it into our community relations packet. Additionally, it also serves as our annual brochure, avoiding the creation of a seperate piece altogether. We've received some wonderful accolades from our board, donors, volunteers, as well as our peers and will continue investigating ways to cut costs and deliver information our investors are looking for. I would be more than happy to share whatever information I can regarding this particular project. Thanks and enjoy the discussion!

Kivi Leroux Miller:
    Hi Everyone, Thanks to the Chronicle for hosting a chat on one of my favorite nonprofit marketing topics and to all of you for participating today. I'm looking forward to answering your great questions. Fire away!

Question from Trudy, private nonprofit:
    What is your opinion on devoting larger portions of the annual report to fiscal responsibility and demonstration of funds used?

Ken Grunke:
    Thanks Trudy - great question! I whole-heartedly concur with that concept! After receiving feedback from many of our donors, board members, active community members, community leaders and volunteers, it is definitely to the their interest that nonprofits are focusing more on outcome performance measurements and including (and sharing) those results and statistics through various agency collateral (the annual report being a great piece to do this with). In our case, we took a radical approach to our annual report, by doubling it into an annual brochure (versus creating a seperate piece altogether). This way, we can use this as a talking piece througout the fiscal year as well as sharing the information with prospective investors. Bottom line, we are noticing more and more of our donors are concerned with what impact their donation is making (BEFORE making another gift), regardless of how small the gift (so why limit this information to an acknowledgement letter or newsletter)? I would say that a good portion of our annual report (70-80%) focuses on some aspect of how funds were used and the impact they have made.

Question from Katie Smith, The National Chimpanzee Sanctuary, Chimp Haven, Inc.:
    What is an effective and "space efficient" way to list gifts that are "in honor" or "in memory" of another?

Kivi Leroux Miller:
    I put them right after the donor's name.

John Smith, in honor of Jane Smith Betty Wilson, in memory of her dog Boots Just wrap the lines of text and you can get lots of names into a few columns.

Question from James Hood, Lake George Association:
    Here's our conundrum: traditionally, an annual report focuses on the activities of the previous calendar year, yet donors receive the report 6 months into what is hopefully a very productive year. Can you restructure an annual report so that it is more timely? If so, do you have any creative suggestions for a better title?

Ken Grunke:
    James, thanks so much for this great question! To be honest, we decided that turning our annual report into an annual brochure (not just "A Year in Review") of our agency really helped bridge the previous year's information with moving into our new fiscal year. We focused a lot more on providing statistics about how dollars received were making an impact in the community and using the piece to highlight more success stories, not just from our clients, but our donors as well. We found out from our donors, board, volunteers, etc., that they are looking at how you are making an impact, versus the general detailed messages that seem to get lost in many annual reports. In addition, we will be using our newsletters to continue sharing those statistics and building on them. In essence, we see out annual report as not so much reinventing the wheel each year, but making it a revolving and updated annual brochure. So far, we've received some great feedback. In terms of timeliness, we face similar obstacles as many agencies I'm sure face in terms of receiving the financicals. We try to plan as far out ahead of time with all of the content and then wait for the last minute to receive the financials. Once those are dropped in, we get it out to the printers and to the community asap.

Question from Sybil Jones, HomeFront:
    Who should get an annual report?
* current donors?
* potential donors?
* former donors?
*all of the above?
Please put in order of importance and why.

Kivi Leroux Miller:
    All three in this order: Current donors first - you need to report back on how you are spending their money. Former donors next - again, you may still be spending their money and they may be more inclined to give again once they see results. Potential donors next - to show them all the great stuff you are doing and how they can be a part of it by becoming a donor.

Question from Regina Mooney, Stoneleigh-Burnham School:
    What are the categories of information one should include in an annual report? What are the popular formats, meaning are pie charts better than graphs, tables, etc.?

Kivi Leroux Miller:
    First and above all, your accomplishments. This is NOT the same thing as activities. We want to know the difference you are making by doing what you do -- not just that you are doing it.

In terms of the financial info, the most important thing is that the data can be easily understood and that it communicates quickly and clearly where you get your money and how you spend it.

I'm not a big fan of printing the complete financials in an annual report - just takes up too much space. I'd rather see some good charts, a brief text descriptions of what the numbers mean and a link to where I can download your complete financials on your website.

Question from Maria A., small non profit:
    What are the new trends? How can you incorporate the latest technologies to present a compelling annual report?

Ken Grunke:
    Maria - something we are still researching and trying to discover! Currently, our recent annual report became a hybrid. You see, we found out that our donors want to be recognized for their achievements, but it took up so much space in the general annual report. So, we took a hybrid approach in which we posted the donor listing on the website (giving them even more visibility and recognition) as well as creating the rest of the annual report in a more compact format (see my intro). Ultimately, we are experiementing with putting surveys in the annual report (verus remittance envelopes)in hopes that we can attract more of our donors to the website, thus making our annual report 80-90% electronic (saving on paper waste) as well as encouraging our donors to gravitate and check out our website (which, to this day, we have found many of them still haven't done yet). In the future, we are hoping to email the report out versus mailing. Since everyone is becomgin so much more environmentally aware, our donors and supporters are really grabbing on to this concept.

Question from Sybil Jones, HomeFront:
    What data do you have that shows the impact on giving as a result of a publishing an annual report?

Kivi Leroux Miller:
    I don't think I've seen data related specifically to annual reports themselves, but there are lots of studies that show that donors want feedback on how their previous gifts were spent before they will give again. Your annual report is one way to provide that feedback, although it shouldn't be the ONLY way you communicate results with donors.

Doing an annual report is also considered a nonprofit management best practice by all the big orgs that publish those kinds of guidelines. Nonprofits get special tax status and publishing an annual reports shows that you take the responsibility that comes with the status seriously.

Comment from Laura Wallace, Covenant Health:
    Just an idea to share on the topic of honorarium/memorial listings... In order to conserve even more space, especially if you receive multiple gifts in honor of a single person, list the gifts alpha by the honoree with the alpha list of donors who gave to that honoree underneath: In honor of Laura Wallace
John Doe
Joe Smith
Nancy Nice
etc.

Peter Panepento (Moderator):
    Thanks for the comment, Laura. If others in the audience have advice to share, please feel free to add it to the conversation. You can submit your comment by clicking on the "ask a question" link. Thanks.

Question from Elizabeth Van Fleet, Americans for the Arts:
    We're looking to move online while also having a print piece for our high-touch donors and potential partners. What's the general consensus about having more content/different content on the two different versions? Also, what's the best way to "announce" an online annual report? Should it have its own e-mail annoucement or is there a more effective, unique way to annouce it?

Kivi Leroux Miller:
    Moving annual reports online is definitely a trend for a lot of reasons, including the expense of print production and mailing.

I don't think the content should be different per se - you need to be telling the same story in all the versions. But it's fine for one version to be shorter or more focuses on one particular aspect of your work, as long as everything you publish has a consistent message and the pieces all work together. The various formats you use online (web pages, slideshows, video) all have their own strengths and weaknesses that will affect exactly what you say where.

Announcing that "your annual report is now available" is pretty boring . . . instead talk about what's inside. Use that email newsletter as a teaser or executive summary of all the good stuff in the full annual report. And don't just announce it once - remind people that it's available in all your communications for a few months after it comes out (just short reminder here and there).

Question from Karla, Academy of Breastfeeding Medicine:
    Given the classic problems of "decisionmaking by committee," who should make the final decisions about what stays in and what goes out? There are so many competing needs, uses, audiences for an Annual Report!

Ken Grunke:
    Great question Karla! In working with our board, the president (executive director), volunteers, some of our donors and our Resource Development Committee (RDC), we realized that our department (the Advancement team)needed to make the decision with an outline of not only what the intention of the annual report is going to be (how will it be used), but also, what will need to be the required contents of the annual report itself in order to serve that purpose. Once we came in with the proposal, we received input and feedback from our president, board, volunteers, donors and RDC with the reminder that we needed to keep to our outline and what we have researched to be the best use of our annual report (what would be the most beneficial content and most useful to our audience). We seemed to receive some great support from the various groups knowing that we had an agenda laid out and an identified purpose for the annual report (versus getting feedback earlier in the planning stages from all of groups and ending up with a big mess).

Question from Hsien Hong Lin (Joe), Taiwanese, Kent State University:
    For me as an international researcher who has an interest in nonprofit fields, how can I find American nonprofit groups’ annual reports on the Internet and how do I read these annual reports effectively and efficiently, in other words, quickly to catch key points from the annual reports?

Kivi Leroux Miller:
    If you want to do a random search, you can search "annual report" and .org in Google's advanced search. I also have links to lots of reports on my websites here:

http://tinyurl.com/2xu7ae and http://www.nonprofitannualreports.net/annual_report_samples.htm

As for reading quickly, just skim the pages and if they've done a good job with headings and subheadings, you should be able to get the main points.

Question from Lisa, museum:
    What are the basic pieces of information that today's donor is looking for in an annual report, aside from the list of donor names?

Ken Grunke:
    Lisa - awesome question! I can't tell you how many of our donors and supporters are looking at ways in which their dollars and support as made an impact. I think statistics, outcome measurements and client quotes or stories are really crucial to continuing the connection with your donor contstiuency and general supporters. Another piece we have found to be crucial is quotes from our donors. Many of our donors are interested in why other donors are giving. And so, we are in the planning stages of involving more quotes from some of our longtime donors in the community. Another piece is the financial aspect. Although this is essential (especially for our grantors and many other funders) we have found that many of our donors and supporters don't want all of the details of the financials. Instead, an easier, more readable graph is essential along with some highlights. If they want more details of the financials, we make public our audit statement on our website or can a copy of it to them in the mail.

Question from Jennifer Newberg, small non profit:
    My small organization has been through a lot of staff transition in the last year and a half. Because of this our biennial report that was supposed to be created for April 2005-March 2007 was not. At this late date - is it recommended that we create a belated report or skip it until we create the next scheduled report (April 2007- March 2009)? Thank you very much for your helpful response.

Kivi Leroux Miller:
    I'd suggest doing some kind of interim report and calling it a "progress report" or something like that. I work with lots of nonprofits who for whatever reason just can't stay on a regular schedule and instead they issue "progress reports" every now and then. The most important thing is that you are putting your accomplishments out there for donors and others on some kind of regular basis, even if it's 12 months in between one time and 18 months the next.

Question from Tom Parker, JVS:
    What are your thoughts on how much written content donors expect to see in an Annual Report? Last year, we got rid of our traditional lengthy articles in favor of a few short personal stories and bite-sized informational sidebars. The feedback we got was positive, though I'm curious if others might feel that we're not providing enough information anymore.

Kivi Leroux Miller:
    When in doubt, always ask your target audience (this is my answer for everything!). Call up some people on your list and ask what they think.

The reality is that people are reading less and skimming more. I'd say invest more time in those short stories/articles and writing extraordinarily good headlines, subheads and captions -- which more people will read than the articles themselves. Your headlines and captions ALONE should tell a story. This goes for all communications pieces, not just annual reports.

Question from Kristen Taylor, Knight Foundation:
    Ken, was the brochure put out at the same time? We have had a great response so far to compressing the annual report into twelve pages and enabling comments in an online site (http://progressreport.com)

Ken Grunke:
    Hi Kristen - Our brochure was also the annual report and, therefore, when we sent out the annual report, we also made sure to include the it in our outreach packets as well as throughout our office locations for anyone in the community to come and pick them up. I hope that answers your question! BTW - Great job job on your twelve page annual report and incoporating the comments section (I'll check it out after the discussion)!

Peter Panepento (Moderator):
    We're halfway through today's discussion. We've received a ton of great questions thus far. Because of the volume of questions today, I'd like to encourage those who haven't asked a question yet to submit their queries soon. For those who have asked a question and haven't yet received an answer, please stay tuned! We'll post the answer as soon as it's ready. Thanks.

Comment from Tina:
    For Tom Parker. We did the same thing with our annual report and we have received very positive feedback.

Question from Caroline Grange, Santa Barbara Museum of Natural History:
    Regarding the financials, do you recommend just including the financial statement from the audit (which my CFO prefers) or simple income/expense summary (which I prefer) showing our operating costs?

Kivi Leroux Miller:
    I strongly prefer the summary in print for lots of reasons - easier to read, cheaper to print and mail, etc. And it's just much more reader friendly.

Include the full statmeent as a PDF on your website and make it clear in your report that you can download it if you want it (and then track how many actually do - that will tell you something).

In the report itself, it's much more important that your financial section communicate in plain English what is going on with your org, where your money comes from and how you spend it. This section should tell its own story that is consistent with everything else you are saying in the report. Pages and pages of numbers don't do that.

Question from Jeannette Archer-Simons:
    Any ideas on how to create a more interactive annual report - almost customized to the donor. Are you using any push marketing strategies with the annual report and how do you get the donor to read.

Kivi Leroux Miller:
    Great question and one I'm actually researching now for the next edition of my annual report e-book.

When you say interactive, I'm assuming you mean online. I think you can set up the pages so it's very clear that if I click here, I'm going to see results and read stories about this topic, and if I click there, it will be another topic. Don't just set it up as page one, page two, etc. Let the donor jump into the middle if they want.

Another idea (as this is off the top of my head, so who knows how good it is!) would be to set up some sections based on gift ranges -- so if someone gave under $100, they could see real examples of how that gift was used. Same for higher donations, depending on what you typically get.

Question from Angeline, higher education nonprofit:
    This question is for Ken. In creating an annual report that doubles as your organizational brochure, how do you keep your material fresh without repeating the same program descriptions year after year? What do you do with your previous reports?

Ken Grunke:
    Angeline - Our we are looking at our annual report/brochure to be updated each year with new initiatives and outcomes that the programs have produced in addition to reminding our donors of what are programs entail and the services that are attached (which are many). We found through our donors and supporters that many of them want to know "what's new with Pillars" and "what have you accomplished" versus "who are you" since, as you probably know, can only get answered in so many ways. We are currently setting up an archival file through our website so that anyone in the community can access these annual reports. We want everyone (and remind them) not just what we've accomplished each fiscal year, but also how we've grown through many fiscal years!

Question from Lisa, museum:
    Our donor base is older. I'd love to move the donor list online, but would be afraid it would defeat the purpose of why we publish those lists anyway, when a large segment of my major donors probably would not go online to find it. How did you weigh the pros and cons of publishing that list online?

Kivi Leroux Miller:
    If the issue is really cost of printing and mailing on paper, decide how much you can really afford to give to the lists (2 pages, 4 pages?) and then see what you can fit on those. You can split the donor list and say that only donations of a certain level or donations to a certain program will be in the print report and the rest will be online.

Also look at other print vehicles you have now where you could include smaller donors in print more often, like a quarterly newsletter. There is no law that says all donors have to be in your annual report, so come up with a hybrid that works for you and your donors.

Question from Darian Atkins, Girl Scouts of Louisiana - Pines to the Gulf:
    I'm looking for a cost effective way to produce something other than a traditional booklet. It seems that anything outside of 11x17 sheets begin to get pricey.

Ken Grunke:
    Darian - this is was a similar dilemma that we were facing. We decided to go to several printers/designers and reach out to them, asking them to compromise prices as much as possible and negotiating as much as possible without stretching each one of us to thin. We were acutally pleasantly surprised to received a low-cost quote on a larger sized annual report. In addition, we were even more surprised to find that recyclable paper has come a long way and there are so many varieties and styles (and many of them less expensive than the non-recyclable). I would also suggest looking into a printer who might be willing to donate part of the expense as an in-kind donation and marketing their name/business on the very back of the annual report or somewhere on the annual report. In addition, because we were saving money by combining our annual report with our annual brochure, we justified the bottomline cost associated with the piece - it was one of the best investments we've made.

Question from Barbara Ellerbrook, Bariff, LLC:
    I consult for a non-profit who has asked me to write their annual report for them; this is the first annual report though they have existed 9-years. I have asked for drafts of activities from their staff in program and fiscal areas but all they are giving me are "statistics". What do you suggest?

Kivi Leroux Miller:
    You need to do some interviewing.

Make staff give you a half hour and ask them what they are most proud of, what's the biggest challenge they've faced, what do they know now that they wished they'd known then -- that sort of stuff. You have to get them talking about the work and the good that's come out of it. Also talk to volunteers, active donors, other supporters if you can.

Question from Dorcie Dvarishkis, Community Medical Center Foundation:
    What would you say are the essential components of today's nonprofit annual report? How has the existence of websites changed those components over the last few years?

Kivi Leroux Miller:
    Essentials are the same, regardless of format. Your accomplishments (not just activities)are by far the most important.

See these tips on all the major sections:

http://www.nonprofitannualreports.net/annual_report_tips.htm As far as what's changing, content just has to be shorter, more to the point.

Question from Roberta Sladovnik, Colorado Children's Chorale:
    I'm interested in ways to present information online. By "online" report, is it simply a PDF of the actual document, or do you have something more interactive? How do your donors feel about an online annual report? If you have an online report, do you still print hard copy reports? Thanks in advance for your insight.

Ken Grunke:
    Roberta - great question! We've found that a PDF version of our anunal report works best for our donors. It's software and a version in which is easily accessible. We have not experiemented (nor have asked our supporters) if they would prefer something more interactive. In terms of their thoughts in welcoming an online report, many of them acutally prefer it. With many of us becoming more concerned about our carbon footprint, many donors reacted very positive to our intention of creating the annual report on recyclable paper as well as utilizing online sources. In addition, our donor profile is slowly changing in the sense that many who are older are now exposed to online access, the internet and using a computer and yet, at the same time, we are seeing a younger donor constituency approaching who are preferring more correspondence electronically. We still print out hard copies to our donors, but now ask through surveys and evaluations, for email addresses, substituting these with their snail mail. Good luck to you!

Question from Megan, private nonprofit:
    I'm tackling my first annual report with my organization, and we have so much information to present that I fear the report will become text heavy. What is a good balance between text and graphics/pictures?

Kivi Leroux Miller:
    Just because it's your first report doesn't mean you should include everything that's happened. You really need to narrow it down to the most important accomplishments. Pick 3-5 messages or stories you want to tell, focus on those, and skip the rest.

As for balance, something like 1/2 text and 1/2 graphics/photos might be a good ratio to start with and see how it shapes up.

Question from Jamey Campbell, CMDA:
    In response to the question from James on timing, our fiscal year runs July - June so our annual report hits in November/December and works well as a compliment to our year-end efforts and donors "feel" like the timing is right because the year is about to end. Just a thought. And that way you get to promote two year ends as well.

Ken Grunke:
    Jamey - I think this is an excellent point! Thanks so much for sharing this!

Comment from Tom Parker, JVS:
    Comment for Barbara: See if you can get the organization to allow you to interview clients or other people who have been affected by the work of the agency. The stories of real people can be far more compelling than any numbers and statistics.

Question from Tina Laseter, medium size food bank :
    Is there an industry standard for a the size of an anual report and then the cost per piece?

Kivi Leroux Miller:
    No, it's all over the map.

Question from Lisa Merrill-Burzak, Lazarus House:
    We are in the midst of redefining our Annual Report. We want to trim it down. What do you believe are the absolute essentials for an Annual Report?

Ken Grunke:
    Lisa - in talking with our donor constituents, volunteers, board members, etc. we ultimately agree that donor acknowledgement, some sort of fiscal representation, and a combination of stories, quotes and statistics about the impact of their dollars were crucial to them. With that said, depending upon the interest of your donors, board, volunteers, etc., there may be something else that they all agree should be a priority in your annual report. We found it to be so imperative that we were asking a pool of our supporters wha they wanted versus what we think they wanted. In addition, we you start utilizing online/electronic options, you can save alot of time, money and space in your annual report design.

Question from Jessica, UAHuntsville:
    Have either of you gone "Green" with your annual report? What has been the experience and the feedback, especially from non-internet users?

Kivi Leroux Miller:
    I started out working almost exclusively with environmental groups, so the annual reports I did were always on 100% recycled paper or even tree-free papers. We always printed with veggie based inks. Those are fairly easy to implement and I do think donors appreciate the effort.

Of course, skipping the paper entirely is the better green choice.

If you do have lots of donors who aren't online, you can produce a short version for them, maybe a 2-page or 4-page newsletter format (or recycled paper!) and say that you are cutting back on the length specifically to reduce your environmental impact.

Question from Kimberly Coon, Indiana Mothers' Milk Bank, Inc.:
    My organization is in the process of creating our first "annual report," but since we're reporting on three years of activity (since our establishment), we'd like a more appropriate name. Any suggestions on creative approaches to reporting on more than one year as well as name suggestions? Thanks!

Kivi Leroux Miller:
    I usually go with "progress report." Don't report on everything - really narrow it down to the top 3-5 best stories from that time period overall. Annual reports are not supposed to complete historical records; they are supposed to report back on your major accomplishments.

Question from James Hood, Lake George Association:
    I certainly buy the concept of putting the donor list online to save space, but I can see the look of terror on my Development Director's face that she feels this might fly in the face of donor recognition. Do you have any feedback (even initial) how donors feel about this?

Ken Grunke:
    Hi James - actually, many of our donors surveyed have preferred this for a number of reasons. One, they are being recognized, but on a "grander" scale. They are truly being recognized beyond the area in which we deliver our services. In addition, they feel as if they are part of the whole "cost-savings" and "environmentally friendly" approach to annual reports. This has really been important to our donors more than ever and the fact that they are part of this gives them appreciation to know that our agency is recognizing this as part of our purpose. Believe me, I can see how this may concern some professionals though and even supporters, which is why we had to be sure to go to several board members, committee members, volunteers, donors and even partnering agencies who were already doing this.

Question from Jody Parsons, Brighter Beginnings:
    Do you have a recommendation on percentage of space devoted to graphics vs. words. We are working on an annual report for our 25th anniversary but essentially want it to be an identity piece we can leave behind and use for several years. Also how to communicate the impact the organization is making - individual client stories vs. statistics or both?

Kivi Leroux Miller:
    My gut reaction is 50-50. I like a mix of stories and stats. Put the stats in some kind a quick scan format, like a list or chart. Don't just run them into the text.

Question from Lorie Martin, Center for Health Care Strategies :
    My organization has also gone the route of a “year in review” (actually two years, we’ve produced biennially) document rather than traditional annual report format to give the flexibility of a program overview brochure. We also pare down financials significantly. I’d appreciate any pointers on how much, or ideally how little, to include for financials. This information tends to limit our shelf life.

Kivi Leroux Miller:
    First of all, that approach is fine. As I've mentioned in other answers, I'm not a huge fan of page after page of financials, because I don't think most people read them and the ones who really want to can download them.

The key point on financials is where the money comes from and how you spend it. If you do a good job at grouping items and labeling them so people get it, you can do two pie charts and leave it at that. Although I usually recommend a small paragraph too that says in plain English what the charts say, just for those number-phobes out there.

Question from Rachel N. Rodriguez, Family Voices, Inc.:
    Any suggestions for how to list a large number of donors who wish to remain anonymous? "Thanks to our many donors who wish to remain anonymous" perhaps? I want to show that there are many, not just a handful.

Kivi Leroux Miller:
    What you said is fine. You could include the actual number or an estimate if it's really something you want to emphasize -- Thanks to the more than 100 donors who wish to remain anonymous.

Question from Beth Schwindt, MacArthur Foundation:
    For organizations who are not seeking donations, what would you see as the main purpose of an annual report? Who tends to be the audience and what does these people like to see?

Ken Grunke:
    Beth - one of the key purposes that our research, our donors and general supporters saw in the annual report, was that it was being used to inform the public at large about new initiatives and success in your services. Even many of our religious organizations, municipalities, schools, partnering agencies, all wanted to see what was happening that is new and fresh as we deliver our services each year. This spills into the overarching concern about what is the impact. And we attempted to use a combination of various ways to share what the impact with support raised from the community (i.e. storied, statistics, outcomes, etc.). Again, our audience is so diverse, that the information had to be succint and yet relavant to their support (whether it would be financical, volunteer, or other).

Question from Angela Lee, Chambers Family Fund, family foundation:
    I've noticed that more and more grantmaking foundations are using a more narrative approach in describing their grants and the work of the grantee organization supported. What is the feedback among the nonprofit community regarding this trend? Do prospective grantees find longer narratives and highlights to be more helpful than a listing and brief description of each grant awarded by the foundation?

Kivi Leroux Miller:
    Storytelling is all the rage because it gives readers a better understanding of what's actually going on. For example, lots of grants are for "capacity building" -- what the heck does that mean? It's impossible to know without some good examples of what that capacity is and what it allows the organization to do.

I do think the lists are still helpful, because you see at a glance what kinds of orgs and projects are funded. Some kind of hybrid is probably best in this case.

Question from Meghan, Local United Way:
    Kivi, Thanks for being here. Our organization is considering creating an online (possibly interactive) annual report this year instead of a paper one. Any thoughts on what we should be considering e.g., accessability issues, good examples of online annual reports, etc.

Kivi Leroux Miller:
    You are welcome.

I'm doing some research now on this question exactly so I'll have a much better answer for you later this fall. One idea that I really like is to have a very short video (definitely under 5 minutes) where you give some good examples of what you have achieved. Then breaking down the content however you think makes sense for your donors (by project, by geography, etc.).

Question from J Russell, Nurture.biz:
    What role do you feel story plays in bringing the information into an appealing frame? And what online examples do you think implement effective storytelling or effective presentation of information? Thanks! This conversation is so timely!

Kivi Leroux Miller:
    Story is incredibly important. I have lots of storytelling resources on my site and blog.

Free articles:

http://www.nonprofitmarketingguide.com/blog/category/storytelling/ Paid training:

http://www.nonprofitmarketingguide.com/resources/live-webinars/nonprofit-storytelling/

http://www.nonprofitmarketingguide.com/resources/storytelling/

Question from Sofia, EDC:
    Our organization is celebrating its 50th anniversary this year and we're discussing how to commemorate that anniversary in the next report. Can you share your thoughts about commemorative annual reports, what works or doesn't?

Ken Grunke:
    How wonderful Sofia! We are also celebrating our 80th and will be atempting the same feat! Unfortunately, we have not done a commemorative report before so this will be our first. In doing this, I can tell you that we found it to be imperative to reach out to "founding" families and members of our organization as well as past board members and volunteers to share their stories with us about what our agency has meant to them. This may include focus groups, face-to-face meetings, and the like. Overall, we will be taking the same approach through our first annual report as with this one, in that sharing the stories and how our agency has made an impact in the community. Metropolitan Family Services of Chicago, a similar agency to us, but much larger, has done a fabulous job at a commerative annual report and will be one of many organizations that we will be reaching out to to research a "best practice" commemorative annual report. Kivi may also have some insight into this. I look forward to hearing about your progress!

Comment from Tina, Kansas Children's Service League:
    A suggestion, last year we produced a letter & a one page summary (including financial summary) and sent to our donors instead of an AR. We then suggested they go online to view the report or contact us for a hard copy. The response to this was very positive - donors appreciated us not spending extra dollars on print & postage costs.

We produced a smaller number of printed reports. We did hand them out at meetings/ visits to most of our board members, close friends. The one issue we found with this, however, is our costs per piece went up as design costs and the size of the report remained the same. For 2009 we'll be looking to reduce both of these expenditures (I'm glad to see the success many of you have had w/ listing donors online.)

Question from Rachel N. Rodriguez, Family Voices, Inc.:
    I am painstakingly contacting each donor to a) ask if they wish to be listed and b) confirm that their info is correct. What is the default if I don't get a reply from them before going to press? To list or not to list?

Kivi Leroux Miller:
    For the average nonprofit, I say do the list. If for some reason you are working in a sensitive field where your gut tells you that some people really might not want to be listed, then I'd give it some more thought. But people who are that concerned will usually tell you upfront they want to be anonymous.

You are likely to p*ss off way more people by leaving names off the list than by including them.

Question from Meghan K, local United Way:
    Anyone have any good links to online Annual Reports done well?

Kivi Leroux Miller:
    I get this question all the time, but have resisted putting together a list just because there are so many variables and I hate the idea of nonprofits copying a report format that may not work for them just because someone like me put the format in a Top Ten list or something.

In one of my previous responses I included links to lots of reports. Look at a whole bunch and see what appeals to you (and what you think would appeal to your supporters -- ask them!)

Question from Peter Klebnikov; mid-sized non profit:
    We are thinking of printing our annual report on 11" X 11" stock (non-folding). Is this relatively large size likely to aggravate recipients? It fits in most briefcases but not file cabinets. thanks.

Ken Grunke:
    Interesing question Peter. In our research, we have found that pieces of this size would be a little awkward to our donors and supporters, but also drew the benefit of making it a talking piece that you can actually have on hand, hold and talk with (where it wouldn't get lost) and share the agency information with a prospective friend, family member or donor. It becomes almost more interative in a way. My suggestion to you would be to gather feedback from a focus group of donors and maybe even board members and find out what their intital thought would be since, most likely, they would be a nice representation of your consumer base. I can tell you that our fold out (when folded out) did not become awkward for our audience, but rather interactive.

Question from Jenn, small nonprofit:
    We're coming up on our 30th anniversary as an organization, and thinking about ways to incorporate that into our annual report. How do nonprofits usually address anniversaries and major milestones in their annual reports? With a special data section, president's letter, or other special features?

Kivi Leroux Miller:
    This might come off as rude, so my apologies, but people generally don't care about anniversaries nearly as much as the people within the organization. It's fine to mention and maybe include some kind of timeline or sidebar about it, but I wouldn't let it take over the annual report. People are much more interested in what you've done lately.

Question from Danielle, small non profit:
    What are some examples of items not to include in an annual report? Or, what are some common mistakes in annual reports?

Kivi Leroux Miller:
    Administrative stuff that no one but your staff or board really cares about (we got a new computer network, etc.)

Lots of activity that really went nowhere and produced little if any substantive results -- I know this can be painful, especially if you spent a ton of time on something, but if you can't spin it into a nice accomplishment of some sort, leave it out.

Comment from Laura:
    An idea in response to Rachel's concern re: to list or not to list... We always include a disclaimer-type statement at the beginning of our list: "Becaues we appreciate you, we want your name to be spelled correctly and listed properly. If we need to make a correction, please contact us at (phone number & e-mail)."

Question from Susan, Seattle Children's Hosptital Foundation:
    Has anyone received feedback from donors who don't want their names published online?

Ken Grunke:
    Susan - we have not received feedback from any of our donors who have stated that they do want their names online. Generally speaking, we've found that if they want to be published and publicly recognized, they are fine with being published online. If not, then we take into consideration listing them as anonymous. I don't know anyone else who we have conversed with (agency-wise) who has had an issue or concern from their donors regarding this matter. Thanks!

Question from Joyce, human service agency:
    The corporate sector often creates pdfs of the annual report, emailing it to board members, etc. Do you think the non-profit world is ready to go completely paperless as far as annual reports are concerned?

Kivi Leroux Miller:
    It really depends on your donors and supporters. I think every nonprofit should have some version of the annual report online and a PDF is certainly the easiest transition. Whether you can go completely online depends on your supporters. If the majority are online, I think it's fine. You can always do a very brief article summarizing the report in your print newsletter, so even the people who only get print from you still get some of the story.

Question from Nicole Jorgensen, The Marin School:
    I am in the process of finalizing last years annual report and is it appropriate to publish the report completely online with no hard copy?

Ken Grunke:
    Nicole, the problem with us wanting to post/publish the annual report strictly online is that many of our donors are not familiar with our Web site (or accessing it) and we are trying to make a slow and gradual transition for them. We are still encouraging our donors that accessing the report online is a better option around the board, but I'm sure you will always have those that will want theirs mailed out to them.

Question from Angela Martin, Norton Museum of Art:
    We currently publish our annual repost on line. What do you think of putting the report on a cd for people who request copies of the report.

Ken Grunke:
    Angela, I think that is a very interesting concept. I would suggest pooling a focus group of your donors and/or supporters and asking them how they feel about this. Great question and idea though!

Question from Jocelyn Smith, UCLA:
    In addition to how funds are spent, what other financial highlights do you recommend including?

Kivi Leroux Miller:
    Sources of income, grouped however it makes sense.

Trends in income and/or expenses over time.

If you've historically run in the red, showing how you have brought down deficits over time.

The main thing is that after looking at the page for 5-10 second, I should be able to get the gist of your financial situation. And people always love trend data.

Peter Panepento (Moderator):
    We'll keep the chat open for a few more minutes to try to accommodate some of the questions that haven't yet been answered.

Question from Lorie Martin, CHCS:
    Hi, any suggestions on mechanisms to evaluate the "effectiveness" of an annual/biennial/progress report? Formal and/or informal?

Kivi Leroux Miller:
    I personally like the anecdotal response to it. Call up 20 random people who received it and ask if they remember getting it, what they thought of it, etc.

If you include a donation envelope and direct appeal letter with it, you can also measure the income, but that's not a good sole measure for a report's effectiveness. But you are doing so much more with an annual report than simply raising money.

Question from Sharon-small non-profit:
    I am a brand new non-profit and just setting up the budget. Does anyone have any ideal on what I should allocate for an annual report expense next year?

Kivi Leroux Miller:
    Totally depends on length, format, etc. If you have a budget for a print newsletter, you could use that as a starting point.

Question from Jeanine, Canine Companions for Independence:
    When posting your annual report online, is it ok to just put a PDF on the web, or should you convert your annual report to html and make special webpages for easier searching of content?

Ken Grunke:
    Hi Jeanine, we have not attempted this, but if the interest of your supporters/donors are as such that they are interested in accessing something more interactive, I think it would be a great idea to explore. We have found that our donors and supporters are not there yet, in terms of maximizing the use of our Web site and, therefore, this may be something for us to consider somewhere down the road. I can say that our interest of getting donors to access our Web site is of the utmost interest and this would be a great way to do that. Great suggestion/idea!

Question from Mari, Research!America:
    Coming in late, but quickly reading through - there seems to be disagreement on if and how to commemorate a milestone anniversary in an annual report - one speaker said "Great!" and the other said "No Way!" We're starting our 20th year in January so our AR will feature that milestone somehow... Is this a bad idea?

Kivi Leroux Miller:
    I don't think it's a bad idea, I just wouldn't emphasize it. OK to include, but I wouldn't overdo it.

Question from Margot, New Leaders for New Schools:
    We're thinking of trying to do an abbreviated annual report this year - specifically 6-8 pages. A couple of questions: what are the most critical components for us to include? As a national organization with local outposts, how do you ensure your annual report is inclusive of all locations?

Ken Grunke:
    HI Margot - I think I've answered what our donors and supporters have felt as imperative to them in an annual report, so I hope you are able to check that out in the transcript. In terms of ensuring that our annual report is all inclusive, since we have many offices, we make sure that out donors and supporters (community-at-large) understand the importance that each office plays and make our annual report/brochure available at each office location. in addition, in our future annual report, we will be highlighting the purpose that each office serves (when they were created, what serves they offer, etc). Lastly, in our latest annual report, we made it as general as possible, to the give our supporters the overall understanding that as many, we are one and that our services are complex but delivered through various office locations.

Peter Panepento (Moderator):
    That wraps up today's discussion. We covered a lot of ground today on what seems like a very timely topic for many organizations. Thank you to Kivi Leroux Miller and Ken Grunke for taking the time to answer your questions. And thank you to everyone who joined us today and contributed to the conversation.

Ken Grunke:
    Thanks again to Kivi, Peter and all of you for this crucial and exciting discussion! I wish you the best of luck with your annual reports!

Peter Panepento (Moderator):
    A quick reminder that we hold these discussions every Tuesday at noon Eastern time. Check out http://philanthropy.com/live for information about upcoming discussions and to access our free archive of transcripts of previous events. Our topic next week is improving diversity on nonprofit boards. I hope to see you then.

Kivi Leroux Miller:
    Thanks for all the great questions!