What Funders Look For in an Annual Report

by | Jan 18, 2022 | Emma Willder

Quickbooks Pro Advisor Gold Logo

It’s that time of year again.

When annual accounts must be filed, we start pondering over the format and style of the annual report.

For charities based in England and Wales, there are some “must include” elements to an annual report outlined by The Charity Commission. However, by telling a story and bringing your charity and its people to life, highlighting certain key areas, you can focus your message on what funders specifically look for in these reports, and for many small charities, this can be vitally important. 


Because showing funders how projects are progressing, the charity’s success as a result, and your aspirations for the future can all lead to future funding and donations.

The key messages when writing your annual report with funders in mind should be:

  • what milestones is the charity working towards
  • how securing future funding will help you achieve these goals and milestones, and
  • the impact this will have as a result.

Engaging with your funders in your annual report can be a valuable tool, nurturing new partnerships and recognising those who have helped (and will hopefully continue to help you) reach your goals.

So, what do funders look for in an annual report?

Financial sustainability

Primarily, funders will want to see transparency across all financials. For example, looking at critical financial statements such as balance sheets, income statements, statements of cash flow, etc., to see how a project is progressing due to the funds available to support it, ensuring that it meets all resource and financial obligations.

Be honest, build trust.

Matching your funding to the impact these projects have and showing how they support the aims, objectives, and charity mission allows you to highlight how you effectively manage funding and investment. Remember, a great story can help to put everything into context.

You can also engage funders more by visually displaying financial information as an infographic, showing what you’ve funded, the progress you’ve made, what is still needed to make a real impact, and more.

Visuals capture attention instantly, and it’s important to remember that funders and potential funders will often receive a lot of reports and information, so prefer straightforward, no-nonsense information that is quick and easy to follow.

Your vision for the future

What is the key piece of information you want your reader to remember? What is the key message you want to promote that links to your charity’s mission and vision for the future?

Your vision should be inspiring and clearly outline what you want to achieve in the next 12 months.

For example, do you want to launch a new service, raise additional funds to support more services/clients, etc.? How will this impact your beneficiaries? Can you evidence this?

What do you want to achieve? Why? What lies ahead for the charity? What challenges will the charity face, and how will you overcome them?

Inform your reader how funding and investment into specific projects and areas will help you to achieve these and so much more through their ongoing support

Finally, make sure to tell people what you want them to do next, how they can help further, and who they should speak to, to get involved.

Proof that you’re a worthwhile cause

This section should form the most significant part of your report, showing all your major achievements from the past 12 months.

From fundraising to volunteering, you must tell people just what you can accomplish and how this was all possible because of your team’s hard work, dedicated volunteers, and sufficient funding.

The focus here should be on your funders, showing the impact funding of specific campaigns has on particular projects.

Look to break these achievements down into powerful statistics that are easy to understand, including visuals and real-life case stories and scenarios wherever possible.

Use this as an opportunity to match accomplishments to supporters and donors, showing that you are aware of all they do, that they are hugely appreciated, and that your charity is built on the support of passionate people.

Remember to tell a story in all of your examples, feature people, get their view, ask donors why they wanted to be involved and quote them in your annual report, ultimately, engage with them.

Showing a collective approach towards your overall vision, aims, and objectives is a great way to retain current donors and persuade prospective funders to get involved.

This section is where you can really bring your personality to life and show the more personal side of the company.

It’s important to remember that, yes, your annual report contains a lot of important information, but it must also resonate with your target audience. This is the perfect opportunity to let your personality shine through and promote your brand, people, and culture.

Funders will look to align themselves to organisations that they can relate to, connect with, and who they believe in – make sure you make this section count.

Say “thank you.”

Sometimes we might not say ‘thank you’ enough, or maybe we need to say it a little louder, and your annual report is a great way to do just this and really show your appreciation.

Make sure to thank all of your major contributors, influential staff who have made an impact, board members and trustees who have helped support and shape the charity over the past 12 months, and more.

Not only does saying thank you make people feel valued and that their contributions are incredibly worthwhile, but many non-profit organisations use this section as a promotional tool to entice further funding and investors to come forward.

Final thoughts

If you want this year’s annual report to have a funding focus:

  • Show the effective impact your organisation has
  • Be transparent with your financials
  • Show your appreciation
  • Promote your vision for the future.

Your Annual Report is a roundup of all the great things your organisation has accomplished and achieved in 12 months. Highlighting how the funding you have received has helped support numerous projects, positively impacting those who rely on the services you provide the most.

By including a clear and concise vision for the future, you’re providing a reason for funders to continue to work with you.

If you would like any further details and information on what to include in your annual report, or if you would like support in preparing your annual accounts, send us a message or call us on 01204 582104.

Recent Posts