Why It’s Important to Acknowledge Your Donors in Your Nonprofit’s Annual Report

A common misconception surrounding nonprofit annual reports is that they’re solely a method of sharing financial information and illustrating what your organization has achieved over the past year. In reality, an annual report serves as a way to showcase your organization's achievements, connect with the community through impact stories, and, most importantly, highlight your community partners, stakeholders, and donors.

Showcasing your donors is a way to say thank you for their contributions and publicly show that your organization understands how valuable and important they are in carrying out your organization’s mission. 

This practice is often referred to as donor stewardship, the process of saying thank you for a donor’s gift and building a long-term relationship between your donor and your nonprofit. Building a good relationship is necessary for keeping lifelong donors and supporters – the ones who keep giving again and again, year after year.

With recurring donors giving 42% more per year than one-time donors and the overall interest in monthly giving rising, a dedicated acknowledgment for your donors is essential to your annual report.

How to Showcase Your Donors in Your Annual Report

There are many ways to showcase your organization’s donors in your annual report, but the best way to do so will depend on what your goals are for your organization, your current donor profile, and your annual report format.

To better understand the different methods, here are a few examples of donor showcases and their report format:

1. A Dedicated Thank-You Note

Depending on your organization's size, the number of donors you have, and the design of your annual report, it may make more sense to share a thank-you note for all donors rather than listing them one by one. This is the approach the Planet Women team took for their 2023 Annual Report.

Planet Women takes a unique approach to recurring gifting and refers to these gifters as “Members of the Ripple.” This donor showcase allows them to thank their donors for their contributions while encouraging those who are currently not giving monthly to join their community.

2. Showcase Your Individual Donors

A more traditional approach to showcasing your donors is dedicating the last page(s) to listing your donor’s names. Showcasing donors in this way provides individual recognition, something that donors – specifically recurring donors – love to see. One great example of this style is the Making Waves Education Foundation 2022-23 Annual Report.

3. Feature Your Lead Investors and Donors

An alternative to the traditional annual report formats, an interactive annual report allows you to be creative in how you feature your donors. 

For example, 10,000 Degrees, a nonprofit organization dedicated to educational equity, opted for a microsite for its 2022 annual report. Within their microsite was a dedicated page for saying thank you to contributors and lead investors. They chose to dedicate this space to investors who donated $25,000 or more and showed additional recognition for donors achieving remarkable milestones, such as  5+, 10+, 15+, and 20+ years of gifting.

4. Donor Appreciation Book

One of our favorite ways to showcase all donors is to create a dedicated booklet separate from your annual report to thank all contributors, partners, and investors. A dedicated booklet brings a higher level of awareness and acknowledgment than a one or two-page feature placed before your financial reports.

10,000 Degrees is a great example of this; while they thanked their lead investors on their microsite, they also published a dedicated booklet that recognized all their donors. This is a great addition for organizations as it’s important to recognize every giver, big and small.

What’s the Best Way to Add Your Donors to Your Annual Report?

The best way to add or feature your donors in your annual report will depend on your nonprofit organization and annual report format. You should also take into consideration your organization’s long-term funding goals. For example, does the nonprofit rely heavily on legacy donations? If so, make it a priority to show recognition for your legacy donors.

Alternatively, suppose your main focus is growing your recurring gifts by welcoming donors to join your community. In that case, the organization may benefit more from a single thank-you note to your current donors that encourages one-time donors to join.

After establishing your goals and picking your annual report format, you should focus on creating a report unique to your organization that recognizes all donors and their gifts.

Feature your donors and find the missing piece of your nonprofit's annual report with Acton Circle. Together, we can create a design that makes your mission come alive. Book your free consultation call today to be one step closer to showing your gratitude to your donors.