Episode 15: Your Annual Report

Welcome to another edition of "Around with Randall,” a weekly ten-to-12 minute podcast about making your nonprofit more effective for your community. And here's your host, the CEO and founder of Hallett Philanthropy, Randall Hallett.

Can't thank you enough for joining me again this week. And this week's topic comes from a question from a listener who asked that we spend a few minutes this week talking about your annual reports. And there's a lot more here than I think most people think about. So, I want to break this down into four or five different areas that might be helpful to you to think about when you're doing your annual report.

And we're also going to try to connect it to the idea of how it can be used, where it can be shown, trying to use it and maximize its value, and not just be a waste because it's something the organization's always done or it's just a listing of donors. What can we do to make it more palatable, more read, and more usable.

So let me start with the biggest thing that I think about is number one, trying to keep it simple. I've seen a lot of annual reports in my career. And many times they get so complicated and they're so long that they're not actually read. They're not actually usable in a way that the organization really intends to.

Don't forget an annual report is  - it’s general idea is to give an update and status of the organization - but that doesn't mean that it needs to be the state of the union or that it needs to be in ten-point type. We are keeping it simple with a very specific purpose. I'm going to update people on what we're doing.

I want to talk about our outcomes. We've got some financials. We're talking about details in all those areas here in a minute, but the simplicity of the process is really important. The best reports I've ever seen that I actually enjoy reading are the ones that are just the right length and aren't overly complicated. So number one, keep it simple. 

Number two is this idea of visuals. There's nothing worse than thinking of war and peace as the equivalent of an annual report, meaning page, after page, after page, after page of ten-point type. Annual reports are about telling a story of your organization, but nobody has ever said they have to be in words. Pictures that are carefully chosen and carefully taken can express immense amount of emotion and tell a story at the same time, that's much more valuable than a lot of verbiage. So when you think about visuals and you think about the layout, how do you maximize space when it comes to the idea of using pictures?

And certainly there may be pictures of a board or so that's not what we're talking about. We're talking about action pictures that are of your organization's doings. The outcomes. If you are a hospital, pictures of caregivers and those being cared for. If you're a social service, who are you serving, what's actually happening. So use visuals to your advantage. The old adage, a picture tells a story in a thousand words, or is representational of a thousand words. That's not even close.. it's millions of words, if it's the right picture. 

And that brings us to our third point. The annual report should be emotional. The worst thing is when reports are dry. How do you spark emotion? Action-oriented pictures. And we'll talk about this here in a second, about how to share data in an effective way can really inspire people to want to read more about what's going on. What's the organization doing. So think about pictures and emotion, two and three as important concepts to always keep in mind.

Also in this idea of emotion, you want to talk about outcomes, not activities. If you're just showing and listing your gala and your phone-a-thon, That's not what's going to evoke emotion. Outcomes are going to evoke emotion. The organization was able to accomplish this and these pictures or visuals allow that story to be told. So remember when we talk about elements and mixing things up and visuals, and this idea of evoking emotion, it's about the outcomes and the people that are affected. 

The fourth is the idea of using what I call infographics. I’m all for financials being a part of - and they should be part of any annual report. But very few people actually can read financials effectively, so you want them to actually mean something. So, if your organization is doing really good things, on their financial platform or they're in their financial statements, Infographics can be incredibly important at bringing dull things to life. Things that most people would think of as revenue and expenses can be much more enjoyable if you use infographics design, metaphors, similes, in terms of those graphics, the idea of taking quantitative data, how many people are served and using graphics to quickly display that so somebody doesn't have to take time to read it. They can just see it and assimilate it. 

The more infographics you use, the more color you use in them, the more likely they are to be read very quickly. And that doesn't mean you're hiding your balance sheet or your income statement or your profit-loss or net revenue statements. It means that you're showing the details in a different way. And so don't forget infographics. Colorful. Interesting. Maybe you need to hire a marketing person or designer that can help you design some of these types of elements can be incredibly effective at bringing kind of a stale engagement or  reading to life.

Number five is about how to use an annual report. And the two words that come to mind are kind of scalable and repeatable, or applicable, meaning you can use them in various ways. And so planning becomes really important. If you have a 75-page document, that's really tough to use if you're a major gift officer, as a leave-behind because it's really expensive to produce and it's too long. 

So, are there various ways that the organization can use an annual report, particularly if you're keeping in mind the idea of visuals about the infographics and it's short enough - could it be used as the first entry for either a prospect or a first-time donor to have a better understanding of your organization? That isn't just about the annual report, but about telling the story of the organization that allows the future development of a deeper relationship, which is what leads to major and principal gifts. So think about the various ways it can be used. 

Number two, we live in a digital online world. How are you going to put this online? Will the print version be shorter? And you can use a more in depth opportunity online on your website. Can you include videos on your website where maybe in the past we thought of just printed annual reports. When you send it to someone, can you include hyperlinks if you do it virtually or through email so that they not only can read the report in a PDF or it's downloadable, but they can hyperlink into videos that are even further emotional poles into your organization story and what they're, what you're accomplishing.

Can you include hyperlinks for detail, maybe you have infographics online sign that you are replicating from a printed version. If that's what you want to do, but you hit on the infographic and it pulls up the file. There are endless possibilities of usage online and it can be a great way to email out information, say, “Hey, you know, did you realize our organization does X, Y, Z,” and it's tying directly back to a page in your report that talks about outcomes and about achievement.

Think about it in-depth, more than just a stagnant old-school written report and to do so, we'll talk about it at the end. Planning's really important. Think about it early, get people involved in your office to say, look, if we produce some kind of report, how could you use it? How could you use it? And if you can pull those ideas together, you might get more out of it than just the written pages.

The last thing is, is, and frankly, this whole podcast has been about the tactical, but is kind of what I say is the don't forget number one, don't forget to proofread the darn thing and then have five other people proofread it. And once they're done have 14 other people proofread it. There is nothing worse than glaring errors when it comes to an annual report. So, proofread.

Number two is when you list donors, if you do do it in creative ways, if you're just doing it alpha, because it's easy, take some time and find a new way of doing it. So when I get my law school annual report, the first place I go is my class, 1997. And I give them a lot of credit. They did something interesting this last year that really caught my attention. First of all, it's listed by class so I can see everybody I went to law school with. And then they also then highlighted the people at certain donor levels. Well, that got my attention. Cause it was like, “where do I fit? Where do my wife and I fit?” And then they bolded the ones that had given a number of consecutive years.

That little snapshot of my class told me three very quick things: who was giving, who was consistent, and who was at the top. That grabbed my attention. Do you list it by giving clubs, or sort it by amount, or the largest donors, or cumulatively? Do you include planned giving? Don’t just list names. Find creative ways to grab people's attention and them wanting to look for their name or people that they know in ways that make sense to them. So education has graduation year. Social services might be giving club, healthcare might be by area of service. Try something new and create some depth in this process. 

As I mentioned, start early, get other people's opinions in your office, how they can be used so that it's just not One or two people's thoughts. It becomes a collaborative effort. Include marketing or graphic designers or people that can bring some substance and depth to it from pictures to infographics, to others. Get more people involved. This shouldn't take away from gift activity, but it should be something that is collaborative enough to include more than one or two people.

And lastly, two things you wouldn't think we would have to think about. But recently I saw some annual reports and went "Boy, that one missed something.” And the missing piece - don’t forget to say thank you. Your annual report, in some ways, is a thank you document or thank you publication.

Thank you. Outreach to people who've made a difference for your organization. Say that. Have others say that. Say it often in pictures. “Thank you” is an important concept in making people feel good about their involvement with you. 

And the last thing is, and maybe this is just because it was an interesting year in 2020, this is not a political statement document. You're going to turn people off. This is a story about your organization's outcomes and its achievements and what it means to your community. And it's really meant to be applicable in every segment of our population. It should be received well. So don't forget to thank you’s. Stay away from the politics, a large tactical in our podcast today on annual reports.

And before signing off, I want to remind you first and foremost, don't forget about the website. There are blogs posted there all the time. Just did a five-part series in blogs on board orientation - might be of some interest to you. If you have questions or have a thought on a particular podcast, I appreciate all the comments coming this direction. That's podcast@HallettPhilanthropy.com. That's two L's two T's. HallettPhilanthropy.com or if you think what I said, or I missed something, thought I was crazy or didn't agree. Forgot something. Please send me an email at reeks, R E E K S@hallettphilanthropy.com.

Glad to take a look and see how we can get better and probably bring it up here on one of the podcasts. Don't forget what you're doing in your nonprofit is making a difference. It is incredibly important. It is affecting people's. And even though I don't have direct involvement with many of the people that are touched by the nonprofits, I’m so fortunate to consult with, to be a part of, I see the outcomes and at the end of the day, the reason we're here is to help people to make a difference and you are being called to do this. So let me say thank you to you for what you do for your nonprofit, no matter where you are or where you're listening or what the kind of nonprofits worked for your doing a vocational job in helping people, helping animals, helping others.

Gosh, there could be nothing better. Which brings me to how I like to conclude each podcast. And almost every time I get a chance to speak my favorite saying, some people make things happen. Some people watch things happen. Then there are those who wondered what happened. We're an industry of people who want to make things happen for those who are wondering what happened.

I can't imagine getting up in the morning each morning. Without that kind of pole, that kind of joy, knowing that I'm a very, very, very, very, very small part of organizations that I believe in that I'm fortunate enough to partner with because they're making things happen and you are too, when you have that moment of a little doubt, remember you're changing the world one person at a time for your chosen nonprofit.

We'll see you again next week here on “Around with Randall” and don't forget, make it a great day. .