How to animate your annual report

While financial reports may be a legal requirement to be tabled at your AGM, annual reports can be so much more, with good design, a sense of mission, and great storytelling.

Speaking at the recent Not-for-profit Communications Forum, hosted by Communications and Public Relations Australia (CPRA) in Sydney this month, a handful of clever comms people in the community sector described how annual reports can be re-imagined, presented, and used.

Research organisation reaches its biggest supporters more easily

Breast Cancer Trials has received international recognition (again) for its compelling annual reporting. Communications manager Anna Fitzgerald revealed that her organisation wasn’t even required to generate an annual report but found it a highly effective way of communicating.

Her organisation recently picked up an Australasian Reporting Awards gong for online reporting in the NFP sector for its compelling 2023 report titled Trials Save Lives: Today, Tomorrow, Forever.

The web-based report consists of videos, animations, interactive summaries of research, profiles of researchers, visually interesting financial summaries and detailed statements. It namechecks its major donors and points people in the right direction to support the organisation or to join a clinical trial.

"Being from the NFP sector, we have to create audited financial accounts … but we made the decision to do an annual report,” Ms Fitzgerald said.

“One of the main reasons is to report back on our impact, particularly to our beneficiaries, which are the 20,600 people … who are diagnosed with breast cancer each year. It impacts them, their families, their loved ones, their colleagues. We want to say, 'This is why we exist and this is the impact we are making with the donations you are giving us.’”

Four years ago, the organisation made the shift away from a science-heavy annual report that spoke mainly to researchers, to one that spoke to the general public.

“We made the decision that it's for the general public, and that really changed everything about the annual report. Now anyone should be able to see it and say, 'Yep, I understand what you do, why you do it, and how much impact you're making.'"

Ms Fitzgerald said annual reports also allowed the organisation to highlight progress on its strategic plan, provide up-to-date financial reports, and explain financial spending.

She said that through the annual report, the organisation was able to create consistent messaging about its priorities.

“If you looked at our most recent annual report, we had a deficit of $2.7 million, but having a deficit is not actually a bad thing for us … because we're using our reserves to invest more money into our research program, to do more research in more areas of need to help more people to save more lives.

“In our annual report, we make sure we filter those messages [through] the chair, the CEO and the director of research, and the finance report.”

She said the organisation’s annual reports had evolved significantly since the first one was typed up in 1979, and they had ballooned to “doorstop” sized publications over the next generation.

“I barely understand a word of what’s in it,” she said about one thumping great report with reams of text and almost no pictures or illustrations.

As well as connecting better with stakeholders, the web-based report had eliminated costs for paper and storage, and slashed distribution costs to nearly 1000 members.

Move to an ‘impact report’ mirrors move to ‘reframe overheads’

The head of fundraising at The Smith Family, Lisa Allan, told the forum that despite the organisation’s shift away from welfare support in the 1990s to helping disadvantaged children with education, it continued to use a yearly “impact report” to reinforce that change in positioning. “That’s our starting point.”

Ms Allan said the report was more than a governance document, but one that “breathed life” into The Smith Family’s activities.

Significantly, The Smith Family has been a leader of a campaign to change the way donors and others consider administration costs.

Ms Allan said the Reframe Overhead movement aimed to show that money spent on overheads wasn’t a bad thing, and called for an end to the “starvation cycle” faced by not-for-profits trying to do more with dwindling funds. The movement urged funders to fully fund projects and “pay what it takes” to achieve social good.

The movement is also educating not-for-profits on ways to explain and recast overhead spending to stop them from being judged unfairly for spending what’s needed to meet their mission.

She said the reframeoverhead.org website gave NFPs an easy-to-read four-step guide and research to back its campaign.

“The aim is to shift how we talk about overheads and represent them distinctly, focusing on the impact of our investments."

The Smith Family has put those concepts into practice with an annual impact report using data to illustrate its activities, explain its strategic results, and tell powerful and emotionally stirring stories about its beneficiaries.

“You'll see short-term and multi-year program outcomes showcased in our annual report, helping people understand where the dollars are going and the impact our organisation is making not only on children but also their families and communities.”

She said the report also addressed frequently asked questions such as “Where did your money come from?” and “How did you spend what you earned?”

Financial reports can help tell your story

A former accountant and now governance and strategy expert on the panel said that used properly, an organisation’s annual financial statements can help build a brand, communicate key messages, and encourage more support for a cause.

Justin Hogg, managing director of Right Source, told the CPRA discussion that the financial statements were part of an organisation’s “story” and as a result should be consistent with the rest of the annual report.

“These two documents should be telling the same story,” he said.

This meant leaders should begin collaborating with accountants and auditors well before an AGM instead of tacking a few pages of financial information as an afterthought at the end of the annual report.

In line with creating that consistency, the statements and the annual report should have a common brand identity with the same logos, colours and typefaces.

He cited the example of Foodbank NSW & ACT, which incorporated branding across both its annual report and its financial statements.

A quick look at those financial documents shows the organisation also uses them to briefly profile its directors, and they include an introductory statement summarising the key activities of the organisation.

He said while organisations had to meet minimum requirements in financial statements, it did not preclude them adding further details and more broadly communicating an organisation’s activities.

Mr Hogg suggested organisations should focus on achievements instead of costs in financial statements, to reinforce the work they were doing.

For anyone without a financial or business background, traditional cost items were largely read by the casual reader as “overheads” instead of “delivering services”, he said, reinforcing the views of Ms Allan on the need to “reframe overheads”.

For example, he said that instead of listing “rent”, “wages”, “administration” or “stationery”, organisations could list “fundraising activities”, “grant activities” or “community services” in the financial statements.

Other achievements in financial statements could include research activity, delivering food parcels or providing crisis accommodation.

Focusing on those achievements, even in financial statements, could have a big impact, he said.

He said that such financial statements, when lodged with the Australian Charities and Not-for-profits Commission (ACNC) or with government agencies for grant acquittals, could create greater visibility of an organisation’s mission when they were downloaded by philanthropic organisations, volunteers, supporters or members of the public.