Nonprofit Annual Report Template

First, a correction that saves people a good deal of anxiety. The IRS does not require an annual report. Your Form 990 is the required filing, and it is a tax return rather than a publication.

An annual report is voluntary. It exists because a 990 is unreadable and a donor deciding whether to give again wants something that is not. That makes it a persuasion document with an obligation to be accurate, which is a harder brief than either alone.

The nine sections

Eight to twelve pages. Forty-page annual reports are produced every year by organizations who believe length signals seriousness, and they are not read.

The letter, and why most of them fail

The section every reader skims hardest, because most of them are interchangeable. Every year was challenging, everyone is grateful, the future is bright.

What makes a letter readable is saying something a reader could not have predicted. A programme that did not work and what you learned. A funding decision that went against you. A year where demand rose faster than capacity, and what you chose not to do as a result.

Organizations worry that admitting difficulty reduces confidence. It does the opposite. A report describing every year as record-breaking is not believed, and readers discount everything else in it accordingly. Naming one real problem buys credibility for every claim you make afterwards.

Half a page. Sign it from the chair and the executive director together where you can, because a letter from the board as well as the staff signals a governed organization rather than a personal project.

The numbers section, which is where reports go wrong

Six to eight figures, each of which a reader could repeat afterwards. The discipline is distinguishing what you did from what changed.

Report only what you can substantiate. A funder who asks how you know, and finds the answer is that nobody counted, will remember it longer than the number.

The financial summary

Two tables: income by source, expenses by function. Use the same three functional categories your Form 990 uses, being programme services, management and general, and fundraising, so the two documents agree.

Every figure must reconcile to your financial statements. Discrepancies between an annual report and a public 990 are found, because the 990 is indexed and searchable and sophisticated funders check.

One thing to resist. Do not present your programme expense ratio as an achievement. The pressure to minimise overhead has produced real underinvestment in accounting, technology and staff across the sector, and organizations that advertise a high ratio are participating in the problem. Report the figures and let them speak.

Volunteer time, stated correctly

Valuing volunteer hours is legitimate in an annual report and illegitimate in your financial statements, and the distinction matters.

The estimated value of a volunteer hour was $36.14 in 2025, published by Independent Sector from Bureau of Labor Statistics earnings data. Writing that 4,100 volunteer hours represented approximately $148,000 of contributed work is a fair statement of scale.

It is not revenue. Donated services generally do not appear as contributions on Form 990, and volunteers cannot deduct the value of their time, though they can deduct unreimbursed expenses and mileage at the charitable rate.

Photographs, stories and consent

The part of an annual report most likely to cause real harm, and the part usually decided by whoever is building the layout at the end.

Written consent is needed for identifiable images of the people you serve, and consent given at an event three years ago is not consent for this year’s report. For organizations working with children, in health, in domestic violence, in addiction, or with people who have insecure immigration status, the question is not really about permission. It is whether publication could expose someone, and the answer is often yes regardless of what they signed.

Positions that work in practice. Photograph staff, volunteers, buildings and work in progress freely. Use images of service users only where consent is current, specific, and informed by an understanding that the report is public and permanent. Where there is doubt, illustrate with something else. No photograph is worth the risk to a person who came to you for help.

The same applies to the written story. A story that identifies someone through detail rather than by name is still identifying them, particularly in a small town, and the person featured has to go on living there after your report is published.

Design, on no budget

Most small organizations produce their annual report in whatever tool they already have, and that is fine. Four decisions carry almost all of the visual quality.

One typeface, two sizes. Reports look amateur through variety, not through plainness. A single readable typeface at a body size and a heading size, used consistently, looks deliberate.

Real photographs, or none. A picture of your actual work, taken on a phone, beats a stock image of anonymous smiling people every time. Stock photography of people who are not the people you serve reads as exactly what it is.

White space rather than fill. The instinct on a short report is to stretch it. Resist. A four-page report that breathes is read; a twelve-page report padded to look substantial is skimmed.

Numbers set large. The figures in your year-in-numbers section are the most memorable content in the document. Give them room and set them at a size that makes them the first thing a scanning reader sees.

What to do with it once it exists

The report is a reason to contact people that is not an appeal, which makes it one of the more useful things you send all year.

Send it to everyone who gave, including lapsed donors from the past two years, who are the cheapest people to bring back and the least likely to be contacted. Send it to every funder, including those who declined you, because a declining funder who sees you delivered may fund the next application. Send it to volunteers, who are usually thanked less than donors and contribute more hours.

Then attach it to grant applications for the following year, where it does work no application form allows you to do.

On the overhead ratio

Sooner or later someone asks what percentage goes to programmes. The honest answer is that it is a poor question, and you have to answer it anyway.

Charity Navigator, GuideStar and the BBB Wise Giving Alliance jointly argued that the overhead ratio is a bad measure of effectiveness, because it rewards organizations for underinvesting in the staff, systems and evaluation that make them work. The argument is sound. Their joint campaign website has since lapsed and no longer belongs to them, which is its own small commentary on how far it travelled.

Publish the number regardless, because declining to looks evasive and anyone can derive it from your 990. Then give it one sentence of context. If fundraising costs rose because you hired someone to build a donor programme, say so. Donors accept investment that is explained and distrust numbers that are not.

What you should not do is manage the organization to improve the ratio, which in practice means declining to hire the finance manager or database administrator who would make everything else work.

Naming your board

The section most often skipped by small organizations, and one of the most valuable. List every director with their affiliation outside the organization.

A named board reads as accountable. An anonymous one reads as absent, and a prospective major donor deciding whether you are real is looking for exactly this. It also happens to be information already disclosed on your Form 990, so withholding it achieves nothing except looking evasive.

The outline in full

The line almost nobody includes

One sentence in the contact and legal section telling readers how to leave a gift in their will, with your exact legal name and EIN.

It costs nothing. It reaches people at the moment they feel most positive about the organization. And the annual report is one of very few documents a supporter reads voluntarily without being asked for money, which makes it the single best place in your communications year to raise it.

While you are there, publish the giving levels in your donor listing rather than only the names. Seeing that a level exists between $1,000 and $4,999 tells a donor giving $500 exactly what the next step looks like, and a meaningful number take it without ever being asked directly.

The figures here must agree with your Form 990, and the narrative is a stewardship document as much as a compliance one: see donor stewardship.

Publishing it

Put it on your website as a page, not only as a PDF. A PDF is a poor reading experience on a phone, and a page can be found by search where a PDF frequently is not.

Put your last three annual returns next to it. They must be available for public inspection anyway, so publishing them costs you nothing and is one of the strongest trust signals a small organization can offer.

Then send it to everyone who gave. The annual report is a reason to contact a lapsed donor that is not an appeal, which makes it one of the more useful pieces of post you send all year.

Download this template

Free, no email address, no signup. The full text is on this page as well, so you can read it before you download it.

• Nonprofit annual report template Nine sections with financial tables ready to fill in DOCX · 38 KB

Questions people ask

Are nonprofits required to publish an annual report?

No. There is no federal requirement to publish an annual report, and the IRS asks for Form 990 instead.

What is required is public disclosure. Your three most recent annual returns and your exemption application must be available for public inspection on request, and in practice that means publishing them online.

A few states impose their own reporting requirements on registered charitable solicitors, and some funders require a report as a grant condition. Check your state's charity regulator, usually within the Attorney General's office, and read your grant agreements.

What is the difference between an annual report and Form 990?

Form 990 is a tax return. It is required, public, filed with the IRS, and written to satisfy a regulator.

An annual report is voluntary, written for donors and funders, and designed to be read. It summarises the same year with the same numbers and an entirely different purpose.

They must agree. The 990 is public and indexed, and a funder comparing your annual report against it will notice a discrepancy. The safest approach is to prepare the annual report from the same figures the 990 was built from, after the accounts are final.

How long should a nonprofit annual report be?

Eight to twelve pages for most organizations. Some of the best are four.

Length is a reliable inverse indicator of how carefully the report was edited. Forty-page reports are usually the product of every programme being given equal space regardless of significance, and they are skimmed rather than read.

If you must include more detail, put the summary in the report and the detail in an appendix or on a web page, so a reader who wants it can find it and a reader who does not is not deterred.

What financial information should an annual report include?

Two summary tables at minimum: income by source, and expenses by function, using the same programme, management and general, and fundraising split as your Form 990.

Organizations with an audit often include summarised audited statements or a note that the full audited statements are available on request. If you have an audit, saying so is worth doing.

Include total assets and any restricted fund balances if they are material, because a reader who sees healthy total assets and does not know most of it is restricted will draw the wrong conclusion about your capacity.

Can we include stories about the people we serve?

Yes, and they are usually the most effective part of the report. Get written permission first, every time.

Permission should be specific: for this story, in this publication, with or without a photograph, with or without a real name. Permission given verbally two years ago for a newsletter does not cover an annual report published on the web permanently.

Where the service is sensitive, and much nonprofit work is, consider composite or anonymised accounts and say clearly that is what they are. A story labelled as illustrative is honest. An unlabelled composite presented as a real person is not.

When should we publish our annual report?

After the accounts are final, which for most organizations means three to five months after the fiscal year ends.

Publishing before the numbers are final means either restating them later or publishing figures you will have to correct, and correcting a financial figure after donors have read it costs more credibility than a delay.

If the wait is long, send a short interim note at year end saying what happened, with the full report and final numbers to follow. Donors respond to being told what their money did while they still remember giving it.

Should the annual report be a PDF or a web page?

Both, and lead with the web page.

A web page is readable on a phone, which is how most people will open the link you send, and it can be found by search. PDFs are frequently indexed poorly and are unpleasant to read on a small screen.

The PDF still earns its place. It is what a funder attaches to a file, what you print for a board meeting, and what someone downloads to read later. Produce the page first and the PDF from it, rather than the other way round.

What should a very small nonprofit put in an annual report?

Everything above, shorter. An all-volunteer organization with a $40,000 budget can produce a genuinely good two-page report.

Prioritise in this order: what you did with the money, in specific numbers. Who gave, named. Who runs the organization, named. One story with permission. How to help, with one link. The financial summary can be six lines.

Do not apologise for scale. A small organization that reports clearly and honestly reads better to a donor than a large one that reports at length and says nothing, and the small organization can produce it in an afternoon.

This is reference information, not legal or tax advice. Rules vary by state and change over time. For a decision that carries real consequences, check the current text at irs.gov or your state registry, and talk to a nonprofit attorney or CPA.