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Stewarding Relationships through Annual Reports

There are five main components to the fundraising cycle. Identify, Qualify, Cultivate, Solicit, and Steward. Each component of the cycle serves its own unique purpose. And while each component is essential, stewardship – continued engagement with donors to make sure you retain their support – can reap dividends for your nonprofit.

In today’s economic landscape, stewardship is even more important. With rising inflation, volatility in the stock market, and high interest rates, many experts believe that a recession is likely. A recession could mean a rocky road ahead for nonprofits, and in times of uncertainty, solid relationships with donors are your best bet for weathering any potential disruption.

From event invitations to holiday cards, there are many ways to steward relationships and keep donors connected to your organization. While all these stewarding tools are worthwhile, communicating the impact of a donor’s support is the best way to keep them engaged and supporting your organization long-term.

Customized annual reports are an excellent way to update donors on your nonprofit’s mission, as well as the activities made possible by their gifts. At a time when communication and relationships with donors are more important than ever, an annual report is an important part of your toolkit that organizations cannot afford to ignore.

Far from being perfunctory, annual reports are an exciting and dynamic opportunity to highlight where your organization is at this exact moment in time and how your donors helped get you there. Here are five ways to make your annual reports more effective in stewarding relationships with your donors.

Guidelines for Writing an Effective Annual Report

Sending a customized annual report to a donor is a great way to make sure they stay connected to your organization. While annual reports can vary in content and length, below are some tips for creating a successful report that strengthens your nonprofit’s relationships with its donors.

1. Make the Donor Feel Like an Insider

An annual report is an excellent tool for updating the donor on your nonprofit’s new initiatives and recent accomplishments. You should include a recap of organizational highlights from the past year, as well as a section on upcoming endeavors and events. You should make the donor feel like an insider, so be sure to include some information about your organization that is not yet widely known.

2. Let the Donor Know the Impact of Their Gift

An annual report should include a section on the donor’s previous gift. Reiterate where the gift was allocated and include an update on the enterprises made possible by the contribution. You want the donor to know that their gift was important, so be sure to state the impact of their contribution on your nonprofit.

3. Be Concise

While annual reports can vary in length, they should be concise. Your donors are likely busy people with many commitments. A long annual report is more likely to be tossed aside or not read carefully. When writing an annual report, only include the most pertinent information and try to avoid redundancies.

4. Use Lay Language

As a fundraiser, you know your nonprofit organization inside and out. However, donors might not be familiar with all the technical terms in your field. Thus, it’s important to use lay language and refrain from using specialized terminology in your report.

5. Utilize Creative Enclosures

In addition to sending donors a customized annual report, you should send them some enclosures. This could be a photo of a building they endowed and named or an article about research they helped fund. Enclosures about your nonprofit organization can help donors see the tangible benefits of their gifts.

The Benefits of Customized Annual Reports

By sending annual reports to your donors each year, you make sure donors stay engaged and connected with your organization long after they make their initial gifts. It’s a wonderful tool for retaining donor support. A compelling annual report may help your nonprofit in the following ways.

1. Inspire Continued Giving

By reading about the impact of their gifts, donors may be inspired to make future gifts to your organization. A compelling annual report can ensure that your donors make gifts to your organization year after year.

2. Influence a Major Gift

Perhaps a donor has made small but consistent gifts to your organization over the years. They feel a connection to your organization and an affinity for your mission. An annual report that highlights new and exciting initiatives may spur this donor to eventually make a major gift to your organization.

3. Introduce Friends to Your Organization

An annual report is an excellent opportunity to invite donors to upcoming events at your institution. Be sure to let donors know they are welcome to bring colleagues or friends to the event. Your donors may know people who are also interested in your nonprofit’s mission, and existing donors can become advocates for your organization to new potential donors.

Wrapping up

Donor retention is critical to a successful fundraising operation. A customized annual report keeps donors apprised of your organization’s key initiatives, while also providing them with an update on their gifts. It can be an incredibly effective stewardship tool to keep donors engaged and turn them into longstanding supporters of your organization.