Why Annual Report Design Matters

I saw Dan Palotta’s keynote at the 2013 Nten conference last week in Minneapolis. Palotta describes how, since 1970, the social sector hasn’t moved the needle on our biggest social problems. He believes that this is because nonprofit leaders aren’t thinking big about being willing to invest in their cause. They feel constrained by the artificial construct of the ratio of overhead to program spending. Palotta reminded nonprofits that their goal isn’t to keep overhead low, it’s to solve our great social problems.

Palotta goes on to say that this common practice of using administrative overhead as criteria for determining worthiness is reinforced by the rating organizations Charity Navigator and Charity Watch, who do not report the impact the nonprofit has, but instead, this short-sighted metric. It’s not necessarily true that the less money you spend on design and marketing, the more you have for your cause, because marketing activities have the potential to raise far MORE money for the causes we care so deeply about.

Last week a nonprofit called us to see if we were interested in designing their 2012 annual report. Their mission is to improve housing conditions for the rural poor. Our team thinks this is a highly commendable mission, and we are excited about the chance to serve and support their mission.

And, we really enjoy annual report design. Annual reports can be way more than a pretty set of numbers and a list of donors: they can be a compelling story that attracts greater donations. Thoughtfully designed, annual reports have the power to attract more volunteers and more money for the cause. Annual report design really matters because the quality of the design implies the quality of services an organization provides.

After a short discussion with the nonprofit, we realized that the budget allocated for the design of the report was quite limited. This is typical of many nonprofits because of this environment nonprofits are forced to operate within. Annual reports are seen as overhead, not as the important fundraising and marketing tools that they are. They are on the annual must-do lists, but not viewed as essential to the organization’s mission.

So, how does Palotta’s message tie in with the annual report project? This nonprofits limited budget is hindering them from increasing their exposure and the ability to potentially raise more money with their annual report. Without resources devoted to design, nonprofits are forced to use the least expensive resources, and we see our clients print fewer copies of their annual reports each year. A paper trail of annual reports preserves a nonprofit’s history of impact over the years and tells the story of how lives have been improved. Investing in a digital format allows a nonprofit to spread its message far and wide. So it’s nice to have a permanent paper trail, and a digital presentation makes it easier to spread the word about impact and results.

If a well-designed annual report tells the nonprofit’s story in an engaging and compelling manner, through the eyes of those they help, it can attract greater donations. If it ties back to core values, it shows the organization’s commitment and professionalism (which can also attract bigger grants and donations). If it clearly conveys how donor dollars are impacting real lives — then same thing — more donations!

What effect did your last annual report have, and how could we help you improve the way you tell your story?