Annual reports, contribution statements, tax filings; the list seems endless! As the end of the year approaches, the to-do lists gets longer. You can view your checklist as daunting task, or as a source of donor engagement.
Certain items on the year-end checklist are obligatory, while others offer a chance to commemorate accomplishments, contemplate difficulties and interact with benefactors and interested parties.
Disclaimer: The resources in this article do not constitute legal advice and are intended as educational background only. If you have additional questions about tax or legal filings, DonorDock encourages to ask qualified professionals for guidance on what federal and state and filings obligations apply to your nonprofit.
The IRS requires organizations exempt from taxation under section 501(a) to file their annual reports. These include Form 990 or Form 990-PF returns electronically, unless covered by one of the exceptions.
Utilizing resources such as the IRS’s website can ensure you have the right information in your hands. The IRS News Release regarding tax exempt organizations, is a great example. They link the requirements and other helpful links to the forms and information.
Each state's law may vary, but most necessitate nonprofit corporations to verify or update their basic contact information, including mailing address, names of parties responsible and registered agent. Organizations such as The National Council of Nonprofits offer useful links to the relevant state agencies. It is recommended that the requirements for the registered state of the nonprofit be reviewed.
In addition to required filings, acknowledging your donor’s year long giving is a crucial piece of donor communication and relationship management. There are also requirements from the IRS concerning written acknowledgement of charitable contributions.
The written acknowledgment required to substantiate a charitable contribution of $250 or more must contain the following information:
In addition, a donor may claim a deduction for contributions of cash, check, or other monetary gifts only if the donor maintains certain written records.
Want to simplify sending contribution statements and track your donor engagement? DonorDock's Contribution Statements feature facilitates a task that is both obligatory and often laborious in a convenient and effective manner. The platform offers multiple options for sending year-end contribution statements, enabling organizations to use this process as an opportunity for donor engagement. You can also track your engagement with your donor and keep your supporters up to date.
Annual reports can serve to illustrate a nonprofit's mission, impact, and appreciation for volunteers and supporters. They may also present an additional opportunity for supporters to contribute financially. However, what elements are necessary to make a nonprofit annual report particularly compelling?
First, you need to determine who you are addressing in your annual reports. It is usually donors, stakeholders, volunteers, foundations, and corporate sponsors. You may want to present the information in your annual reports differently for different audience members. In short, consider who you are addressing so you can think about how you are creating your annual report.
Annual reports should provide a comprehensive overview of the organization's accomplishments over the past year, along with photos and financial reports. Additionally, you want to acknowledge and thank your contributors. Through transparency and candor, annual reports are an effective way to build trust with stakeholders and demonstrate the impact of the nonprofit's activities.
It may not be a one size fits all format for your targeted audiences. Solving this problem may require your organization to create different formats and send them to your different groups.
A printed full annual report may work best for stakeholders, major donors, and corporate sponsors. According to the National Council of Nonprofits Warren Buffett has been influenced by a nonprofit’s annual reports.
This full length document filled with helpful information and data needs to still be engaging. Consider including first person stories, visuals, graphics, and detailed information. A full annual report gives you the opportunity to dive deeper and provide more information to your major stakeholders to thank and also give them vision and opportunities to continue supporting your mission.
A sealed self-mailer is a great option for an annual report. This format, which typically consists of two to four pages with pictures, graphs, and infographics, can prove beneficial to community supporters, sponsors, and donors. In order to be effective, the self-mailer should contain relevant information and data while also being visually appealing and easy to read.
Another appealing printed option for a quick annual report is a postcard. This medium can be sent to a wider audience such as community contacts and volunteers. Similar to a self mailer, the postcard should be visually appealing. In contrast, a postcard should only include the most valuable metrics and data. In addition to being easy to create, postcards are also a cost effective printed option.
Digital annual reports are a cost effective and engaging option for nonprofits. This is a great option for all of your donors and supporters.
According to the DRG Group digital reports enable nonprofit fundraisers and marketing professionals to integrate more engaging and interactive assets into reports than static or printed documents. With a digital option, you can include social media posts or videos, from the prior year, that compliment your storytelling and photos, and couple it all to engage donors for longer periods of time.
A nonprofit’s year end checklist may seem daunting, but remember to treat your to-do’s as a way to inform, interact, and engage with your donors. Consider the tips below as you create your annual reports and year end communications.
When creating annual reports and year end communications, it is important to take advantage of available resources in order to foster donor trust and support. These documents can be used as an effective means of communicating with donors.