How To Create Your First Annual Report For A Small Nonprofit (Step By Step Guide + Template)
Written by Dr. Annie Cole, Lead Researcher │5 minute read
If you’re working at a smaller nonprofit and staring down your first annual report, you’re probably feeling a mix of pressure and confusion. Funders, donors, and your board want to see the impact you’re having. You want to show that clearly and honestly, but you don’t have a big communications team or a designer on call.
This guide is written directly for you. It’s a step by step guide to your first annual report for a small nonprofit, with a simple first nonprofit annual report template and checklist you can follow so you’re not starting from scratch.
By the end, you’ll know exactly:
What to include in your first nonprofit annual report
How to structure it so funders and donors actually read it
How to talk about impact and finances in clear, transparent language
Why Your First Nonprofit Annual Report Matters So Much
For nonprofits, your first annual report is one of the most powerful tools you have to:
Show impact
What changed because you existed this year?
How did people’s lives, opportunities, or conditions actually improve?
Build trust and transparency
How did you use the money and resources donors and funders trusted you with?
What decisions did you make and why?
Make the case for continued support
Why is your work still needed?
What are you focusing on next year and how can people help?
If your annual report answers these questions in a way that’s easy to skim and feels honest, you’ve done your job. Your annual report becomes a trust & credibility tool that you can send to the board, stakeholders, donors, and funders to show the impact you’re having.
Annual Report Template
When you’re creating your first annual report for a nonprofit, you don’t need a complex structure. You need something clear and repeatable.
Here is a first nonprofit annual report template you can use right away:
Cover and title
Organization name and logo
“2025 Annual Report” (or current year)
Short subtitle (for example, “Growing Our Impact Together”)
Letter from the Executive Director (or leadership)
1 page in your voice
Honest overview of the year: wins, challenges, and what’s ahead
Mission and who you serve
Mission statement in plain language
Who you serve, where you work, and what problem you’re addressing
Impact at a glance (year in numbers)
People served
Services delivered
Outcomes achieved
Stories from the year
2–3 short stories or snapshots that bring those numbers to life
Quotes from participants, volunteers, or partners
Financial summary
Total income and expenses
Simple breakdown of spending (programs, admin, fundraising)
Thanks and recognition
Donors, volunteers, partners, board, staff
Genuine appreciation
Looking ahead
3–5 priorities for the coming year
Why continued support matters
This is your first annual report template and checklist. You can reuse the same skeleton every year and just update the content.
Step By Step Guide To Your First Annual Report
Step 1: Decide who your annual report is for
For a small nonprofit, your primary audiences are usually:
Funders (foundations, grantmakers)
Individual donors (especially recurring and major donors)
Board members
Key partners and community supporters
Ask yourself:
What do funders and donors worry about?
“Is our money actually making an impact?”
“Can we trust this organization’s financial decisions?”
What do you want them to feel when they read your annual report?
Confident
Inspired
Included in the story
Write this down. It will guide what you include and how you write.
Step 2: Gather your impact data and stories
To create your first annual report, you need a decent picture of what happened this year. You don’t need perfect data, but you do need honest, consistent data. Collect:
Program numbers
How many people did you serve?
How many services, sessions, or events did you deliver?
What outcomes did you track (graduations, placements, reduced wait times, etc.)?
Financial data
Total income and total expenses
Main funding sources: grants, donations, events, corporate support
Expense categories: programs, operations/admin, fundraising
Stories and quotes
2–3 powerful stories that show the change you created
Short quotes from participants or community members (with permission or anonymized where necessary)
Dump everything into one working document or folder. Don’t worry about formatting yet.
Step 3: Fill your annual report outline with bullet points
Use the first nonprofit annual report template above as a starting point. Under each section, add bullet points from what you collected:
Impact at a glance:
147 youth served in after‑school programs
3,200 meals distributed
84% of participants met at least one personal goal
Stories:
Jamal’s story: how after‑school support led to improved grades
A parent quote about feeling more supported
Financial summary:
$X total income, $Y total expenses
Programs: 68%, Operations: 20%, Fundraising: 12%
Step 4: Write your Executive Director letter last
A lot of people think the letter needs to come first. In reality, it’s much easier to write once you’ve seen your numbers and stories laid out.
In your letter:
Start with one honest, human sentence about the year
Share 2–3 things you’re proud of
Acknowledge 1–2 real challenges (funding gaps, waitlists, policy changes, staffing struggles)
Close with what you’re focusing on next year and a genuine thank you
Write like you talk. Your readers want to hear you, not buzzwords.
Step 5: Make your impact visible at a glance
Funders and donors often skim before they decide to read. Your first annual report should make your impact obvious in 30 seconds.
Use:
A simple “Impact at a glance” section with icons and key numbers
One or two charts (bar or pie) for:
People served over time
Expense breakdown
Pair each number with short, clear labels:
“147 youth supported after school”
“3,200 meals provided to families in crisis”
“87% of participants report feeling more confident”
Then include 2–3 short stories that put faces and feelings behind those numbers.
Step 6: Be transparent and calm about finances
You don’t have to share every line item, but you do need enough information that funders and donors feel confident.
Include:
Total income and total expenses for the year
A clear breakdown of expenses into 3–4 categories (programs, operations, fundraising, reserves)
A simple pie chart or bar chart to make it visual
If something big happened (like a deficit, a surplus, a major grant, or an investment in new systems) explain it in one or two honest sentences. That honesty is part of your impact and your integrity.
Step 7: End with gratitude and a next step
Your annual report is also a stewardship tool. Use it to genuinely thank people and invite them into what’s next.
Thank donors, volunteers, staff, partners, and board
Name what you couldn’t have done without them
Give clear “next step” options: donate, volunteer, partner, attend an event, share the report
You want them to finish thinking, “This mattered. I helped. And I can see where we’re going.”
Nonprofit Annual Report Checklist
Use this quick checklist to make sure you’ve covered all of the important topics in your report.
Sections
Cover and title
Letter from Executive Director or leadership
Mission and who we serve
Impact at a glance (key metrics)
Stories from the year
Financial summary (income, expenses, breakdown)
Thanks and recognition
Looking ahead (next year’s priorities)
Contact information and how to support
Process
Defined main audiences (funders, donors, board) and what they need to see
Gathered program metrics and impact data
Gathered financial summaries and funding sources
Collected 2–3 strong stories and quotes
Drafted bullet points under each section
Wrote leadership letter in a clear, human voice
Added simple charts for key numbers
Reviewed and proofread with at least one other person
Annual Reports
share impact and build credibility.
Frequently Asked Questions
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Start with a simple outline instead of a blank page. Use a structure like: letter, mission, impact, stories, financial summary, thanks, and next steps. Gather your program data, financial info, and 2–3 stories, then drop them into that outline as bullet points. From there, turn those bullets into short, clear paragraphs. You don’t need a perfect design; you need a completed, honest report that your funders and donors can understand at a glance.
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Funders and donors want to see three things:
What you did (programs and activities)
What changed (impact and outcomes)
How you used the money (income, expenses, and spending breakdown)
Your first annual report should clearly show those three pieces, with a mix of numbers and real stories. Include a high‑level financial summary that shows your commitment to stewardship, not every line‑item detail.
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Aim for 6–12 pages if it’s a PDF, or a single well‑structured web page if you’re publishing online. Think in sections instead of pages: each section should have a clear heading, a few key points, and maybe a simple visual. It’s better to be concise and clear than to produce a long report no one reads.
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No. For your first annual report, you can use basic tools like Google Docs, PowerPoint, or Canva. Choose one or two fonts, a simple color palette that matches your brand, and use basic charts and photos. You can always invest in more polished design in future years once you have your structure and content nailed down.
Outsourcing Your Annual Report
When you’re in the early stages of a nonprofit, the work always comes first. The report is the thing you squeeze in late at night, even though you know it’s one of the few artifacts that actually changes how funders see you. I’ve been in that phase: small team, big mission, and a board that wants more “proof” while you’re still building the plane in the air.
What I’ve seen, over and over, is that a solid annual impact report quietly changes the room. It gives you something concrete to put in front of funders, a way for board members to talk about you in their networks, and a shared story your staff can feel proud of instead of just another reporting chore. It doesn’t have to be perfect or glossy to do that; it just has to be clear, honest, and finished.
If you’re at the point where you can feel that tension - “we’re doing real work, but it’s not fully showing up anywhere in one place” - a short working session is often enough to get you unstuck. We can sit down like peers and:
Sort through what you’re already tracking and decide what actually belongs in this first report
Sketch a structure that matches your stage and funders’ expectations
Talk through how to frame the hard parts without undermining trust, and still show real momentum
If that sounds like the kind of help you’ve wished you had sitting next to you at the end of a long day, it’s probably worth a call.
