As 2024 comes to a close many non-profit organizations are gearing up for the important, and often times tedious, task of preparing their annual reports. These reports are not just a legal requirement, but an opportunity to communicate the impact the organization has had on the community, celebrate accomplishments, and foster trust with supporters. However, ensuring that your report is accurate and forward-thinking requires attention to detail and time throughout the entire year. If preparing your non-profit’s annual report for 2024 felt cumbersome or stressful, here are three tips for 2025.
- Keep Good Bookkeeping Year-Round
One of the most fundamental elements of preparing an accurate annual report is solid bookkeeping. Keeping track of all your financial records consistently throughout the year will make it much easier to prepare for the reporting season. When you have well-organized financial statements and expense reports, you’ll be able to confidently showcase your financial health in your annual report.
Good bookkeeping demonstrates stewardship and aligns your financial activities with your mission. Making this a priority year-round can prevent last-minute stress during the report preparation process. It also allows you to offer your stakeholders transparency, demonstrating that donations are being spent wisely. To stay on track, consider using accounting software tailored for non-profits or working with an experienced accountant who understands non-profit financials.
Pro Tip: Make sure to reconcile your accounts monthly, track all donations, and categorize expenses clearly to simplify your year-end process.
- Update Board of Directors Directories Regularly
Your board of directors plays a crucial role in guiding your non-profit as it lives out its mission. As part of your annual report, you’ll typically feature your board members and their respective roles in the organization. It’s essential that this information is accurate, up-to-date, and reflective of any changes that may have occurred over the year.
Regularly updating your board of directors information can prevent unnecessary confusion and help maintain your organization’s professional image. Ensure that the contact information, titles, and bios of each board member are reviewed and refreshed as necessary. This also helps to foster a culture of transparency, as stakeholders appreciate knowing who is leading your non-profit and how they are contributing to its success. By featuring the faces and profiles of the men and women on your board, you also open up opportunities for their contacts and professional spheres to want to join your cause and feel connected to the work you are doing.
Pro Tip: In addition to basic directory information, include highlights of any significant contributions or leadership changes among your board members to showcase their active involvement.
- Consider Your 990 as an Opportunity to Showcase Your Impact
Cherewka’s Founding Partner, Mike Cherewka, encourages the non-profits he works with to think of their 990 as an opportunity to showcase their organization, rather than a document to complete out of compliance and bury on a hidden webpage. “Your 990 is a fantastic opportunity to feature everything your non-profit accomplished during the year. Instead of thinking of it as something to check off your list, think of it as a spotlight for your mission, your successes, and your community impact.”
In addition to highlighting your financials, what are other tangible ways your organization has benefited the community? Who are the new individuals and organizations you’ve partnered with? How close did you come to reaching your goals? Be sure to emphasize programs, services, and initiatives that made a difference, and don’t hesitate to include future goals and plans that will continue to drive your mission forward. As one year is ending, the next year, along with its goals and plans, is just getting started.
Pro Tip: Include a narrative with your 990 that details key milestones, positive outcomes, and how you’ve fulfilled your mission. This can be a powerful way to engage supporters and encourage further giving.
Preparing an annual report can be an overwhelming task, but with discipline and dedication throughout the year, it can become something special for your organization and well worth your team’s time. By keeping accurate records, maintaining up-to-date board information, and using your 990 as a platform to highlight achievements, you can produce a comprehensive and engaging report that not only complies with legal requirements but also strengthens your relationships with stakeholders and the communities you serve.
