Financial and Summary Statement
Nonprofits must issue several types of financial statements on an annual basis (corresponding with the organization's fiscal year):
- Statement of financial position (balance sheets)
- Statement of activities (income statement)
- Statement of cash flows
Nonprofits must also be able to provide information about expenses by functional classification (program services, supporting services) and often by natural classification (rent, salaries, telephone).
Annual Reports
Annual reports have two major functions: to report your financial status and to give an overview of your organization's values and accomplishments. High-end annual reports from large corporations are publicity pieces, beautiful designs on high-quality paper with profiles of important individuals and projects that contributed to the company's success. Publicly traded companies make these reports available to all, while other organizations may limit the distribution of various parts of their annual overview and detail reporting.
As you plan end-of-year reports, consider your audience. You will most likely wish to reassure your membership that you are focusing on outcomes for their health and privacy, and reassure donors that their money is being spent wisely. An annual report can also generate interest in your organization on the part of individuals or companies with whom you hope to work. An annual report is a place to show who your organization is, demonstrate your fiscal responsibility, and celebrate your successes with stories and images of positive outcomes for your membership.
