Photos and Account of the Session: Is the Annual Report Nearing Extinction?

The presentation was given by Mark Sedway of the Philanthropy Awareness Initiative and Mary Greene of the Williams Group.

For highlights and thoughts about the session, don't miss this post titled "annual reports, overloaded, underused" from Denise Graveline on her blog called Don't Get Caught.  Denise has been a wonderful contributor to this blog.

The photos are by the multi-talented Kristin Taylor of the Knight Foundation, who has also contributed greatly to this blog.

--Celeste Wroblewski

Comments

[Bruce Trachtenberg]

Apologies to Joyce Kilmer...

Save That Tree

I THINK that I shall never see
An annual report as lovely as a tree.

A tree whose hungry mouth is prest
Against the earth’s sweet flowing breast;

A tree that looks at God all day,
And lifts her leafy arms to pray;

A tree that may in summer wear
A nest of robins in her hair;

Upon whose bosom snow has lain;
Who intimately lives with rain.

Annual reports are made by fools like me,
But only God can make a tree.

[Nancy E. Schwartz]

But what do foundation communicators think about the need for/value of nonprofit org annual reports?

GettingAttention.org readers want to know -- Do their NPO ARs provide desired perspective to funders or are they missing the boat? Any takers?

[Phil Nash]

OK. I'm ignoring some of the rest of my pressing workload and jumping in the water. It's become clear to me that to move our foundation closer to the 2.0 stuff, I have to get some practice myself.

One of the highlights of the conference was Eric Brown's near-death experience describing his hatred for annual reports. I wanted to jump up and say: NO NO NO. Doing an annual report is a totally rejuvenating experience! My blood pressure goes down, my hair gets thicker and darker, and I lose 20 pounds! It's a foundation team-building experience like no other!

But I lie.

The REALITY CHECK for us, and I suspect many others is this:

Trustees are conditioned to expect it and do not go online to read stuff like this. (In the back of my head: "What the hell do you think we're paying you to do?")

They say really nice things about it like, "You make us look so good!" (True fact. Maybe that is what I am being paid to do.)

Senior staff compete for space to "push out their message." They sulk when told that they get a half page, no more.

The AR forces us to look micro and macro at what we've actually done in a year. It wouldn't happen otherwise.

If we didn't have the AR to do, it would free up our time to do something even less relevant for fewer people. Think glossy "evaluation reports." Think Constant Contact enewsletters for all our programs and initiatives (yes, like the ones I and probably you delete the moment the pop in your inbox), and the truly fun job of building a database for any of them.

But, back to the AR. Thanks to the inspiration of The Communications Network, we will keep striving to make it more engaging (we're thinking "yearbook" showing action rather than AR showing our silos) and putting the more brain-death-inducing data online for the two people who may want to see it.

[Eric Brown]

Phil's comment points to the fact that community foundations and private foundations are somewhat different beasts. Community foundations, frankly, are usually better at communications because they have to be. They have to attract donors and private foundations don’t. This reality alone means that the tools they use might differ, and to some donors, annual reports could be pretty relevant. And we all know how important it is to understand our audience when creating a strategy.

For my foundation (Hewlett), which does not market to donors, I think an annual report is a relic of a bygone era, a old tool that used to be the best way to be transparent about the foundation’s activities and grantmaking. But we don’t need an annual report to display our grants or our financials or anything else anymore. As I mentioned at the conference, the Hewlett Foundation’s annual report is available in a print-on-demand version and NOT ONE PERSON HAS EVER BOUGHT ONE (it’s fifteen bucks). Thus, our annual report, the market tells me, is not worth anything to anyone. The Packard Foundation has eliminated its annual report entirely, and I’d be surprised if anyone noticed. I would like to do the same and use those resources to improve our website and better communicate to policymakers and other influential audiences.

That said, Phil’s point is well taken when he says that the process of creating an annual report forces them to assess the previous year’s successes and failures – something we all need to do using one tool or another. If an annual report is useful for them, great. For us, the solution is likely to be somewhat different.

[Rich Neimand]

There was a time when we actually did annual reports for foundations and nonprofits. The first one we ever did for a foundation was an eye opener. It went something like this:

"We want you to do our annual report."

"Okay. Let's talk about what you do."

"We don't do anything."

"Okay....."

"Our grantees do everything."

"Okay....."

"We just help our grantees do everything."

"This is starting to firm up for me."

"And without us, they couldn't do anything."

"So, you're like the invisible hand of God?"

"No, that would be too condescending and paternalistic, but we are indispensable."

"But you don't do anything."

"Right."

"So, what I am supposed to write?"

"Uh, we hired you to answer that question."

Seriously, the only reason to do an annual report is maybe to rebrand an existing foundation or launch a new one. Even in these cases, you need to back the annual report with a marketing strategy; otherwise, it is an expensive coffee table book that never hits anyone's coffee table.

We have found that annual reports are effective vehicles for nonprofits, but only when we use the traditional AR for a branding and communications vehicle in a strategic communications campaign. The best one we ever did was for a small nonprofit that counseled teens on pregnancy and family issues. We featured the teens who were transformed by the nonprofit's work, told a story that was both rational and emotional and left all the financial data to a small quick-printed insert. The nonprofit actually used the annual report for three years, with the only change being an updated insert on financials. Prior to this, nobody could really explain what the organization did. After three years of the same branded AR, the nonprofit had established its niche. The lesson here is that if an organization's only external communication is going to be an AR—and you can't get them off the idea—then use the opportunity to brand the organization and use the same AR for a number of years. The message will finally sink in after multiple yearly impressions—if you have the luxury to wait that long.