Nonprofit Law updates from Cullinane Law Group. February 2013.
Cullinane Law Group
What Makes a Great Annual Report?

It's time when many nonprofits complete an annual report that highlights the nonprofit’s finances, donors, and important work. An annual report is way to show your current donors how their money is being spent. It can also be an effective way to provide an overview of the organization to a potential donor.

What content should your annual report include?

  • Your Successes. An annual report should showcase your nonprofit’s successes. Including program outcomes the nonprofit accomplished is important, but you should also include personal stories from your clients and other individuals who have benefitted from the work of your organization. Ideally, your annual report should incorporate both results and testimonials to tell your nonprofit’s story.
  • Finances. The annual report should also summarize the annual finances. Two uncomplicated pie charts can be used to show expenses and revenue. Readers should be able to discern at a glance the sources of funding and a straightforward breakdown of expenses. A straightforward table can be used to display the balance sheet. Avoid the temptation to explain every expense and use simple category descriptions like “programs,” “fundraising,” and “administration.”
  • Donor Acknowledgement. The annual report is your change to publicly acknowledge your donors. Whether you include types of donors or just list them all alphabetically, the report is one way to thank the businesses and individuals that have helped support your nonprofit.

What else is important?

  • Make It Visually Appealing. Your annual report should be visually appealing. Be sure to include photos demonstrating your programs and activities and utilize graphics to showcase your data. Keep it simple and avoid cluttering.
  • Create Various Versions. Consider having different versions of your annual report based on the medium. Your online version may incorporate video and other graphics that you are unable to include in a printed annual report.
  • Check the Length. Nonprofits have been increasingly opting for shorter and more concise annual reports that range from two to four pages. Consider whether your target audience will want to read a 40-page report on your organization or if a shorter 4-page can convey your message just as well? The full article is here.
photo of Mollie Cullinane
Mollie Cullinane
The Cullinane Law Group serves the nonprofit sector.

We set up and maintain strong and legally compliant nonprofits that have solid bases for long-term success.

We provide risk management and offer practical solutions for sound governance.

We work with nonprofits, foundations, religious organizations, and social entrepreneurs throughout the United States who seek to create positive change.

Based in Austin, Texas.

Clients Nationwide.


Client Highlight
Mile Strong Kids makes athletic events fun and accessible to all kids.

Founded by a group of San Antonio educators and runners, Mile Strong Kids is organizing runs, obstacle races, "mud runs", biathlons, and triathlons a mile long at schools, parks, and other venues, where kids will have the opportunity to challenge themselves both physically and mentally.

With health problems associated with childhood obesity on the rise, Mile Strong Kids is dedicated to bringing fun but physically challenging endurance events to children living in communities at high risk of developing diabetes and cardiovascular disease.

Mile Strong Kids has several Obstacle Challenge courses organized this spring across San Antonio. Sign up your kids to run or get yourself out to volunteer at Mile Strong Kids.
How do we "prove" that our nonprofit has 501(c)(3) tax-exempt status?
A donor may want verification that your organization is a qualified tax-exempt entity. The most common way to show tax status is to give the donor a copy of your organization’s IRS determination letter, which you received when you became a 501(c)(3) entity. This letter shows the type tax-exempt  and whether it is a private foundation or a public charity. If your nonprofit cannot find its IRS determination letter, call IRS Customer Service at 1-877-829-5500 to request a new copy.
Another reliable way to demonstrate your nonprofit's tax status is to confirm that you are listed on the IRS's Exempt Organization List. The IRS updates this publication regularly and lists organizations to which gifts are tax-deductible. 

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