1Board Builder - Annual Reports Toolkit Ed1,2014

10 key considerations for annual reports

1. Show the human faceCase studies can provide readers with a welcome break from the bland figures, tables and statements of your financial reports, and bring your annual report to life by giving an insight into how your organisation is helping people and making a difference in the community.

2. Pictures need to be worth a thousand wordsEven with high-quality images to break up unreadable pages of text (which should be avoided) many people simply won’t read your annual report at all, let alone in full. It’s therefore imperative that your images tell a story of their own. But if hiring a professional photographer is cost-prohibitive for your or-ganisation, sites such as Flickr provide free, downloadable images under Creative Commons licenses.

3. Save the treesInstead of printing thousands of copies of your annual report, which can be costly and harsh on the environment, consider emailing it to interested stakeholders and make it available for download from your website. If you do want to post something, perhaps send a postcard with a short message about your organisation and a link to the digital version of your annual report. You could also record your Chair and CEO reports on video and upload them to YouTube, or follow in the footsteps of The Calgary Zoo, which presented its 2012 annual report on Instagram.

4. Use magnetic headlinesUsing descriptive headings and sub-headings will improve readability and help guide readers through the content, especially those who will simply scan or read bits and pieces of your report. Lists (as well as charts and tables) can also be beneficial in presenting complex or financial information as well as adding visual interest to the page. For an example of effective and prominent headings, check out these annual reports from MacKillop Family Services.

5. Encourage givingPotential donors are likely to be reading your report so it’s important to include contact details and information on how interested parties can volunteer, donate or leave a bequest for your organisation. Naming and thanking existing donors who have supported your organisation throughout the year obviously gives them deserved recognition, but be sure to get their permission before publishing personal information or donation amounts.

6. Assign authorityPut someone in charge of coordinating the job. This may be a project manager or a sub-committee, such as the communications and marketing committee (though one person must take ultimate responsibility). The coordinator/s will then need to decide how the content will be gathered, how long it is going to be (word limits are better than a set number of pages), who will contribute to it and when it needs to be completed.

7. Approach printers for sponsorship Some printers will give not-for-profit organisations a reduced price, especially if they support your vision or you have an existing relationship with the company, or trade their services for recognition in the report. Consider giving printers space for an advertisement on the back cover, or displaying their logo in another prominent location, as well as on your website.

Board Builder: Annual Reports Toolkit An enterprise of:

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8. Save yourself the embarrassmentIt’s easy to rush the editing process because by now you’re probably, well, over it. But ideally you should get two people with fresh eyes to read your report from cover to cover, check all facts and figures, make sure everything is understandable to an everyday reader, and check spelling (particularly names). Also get your treasurer to review financial information.

9. Define diversityYou may consider including a diversity benchmark in your annual report, such as how much of your grant funding flows to Indigenous, cultural and linguistically diverse and disability groups or the representation of these groups, as well as women and young people, in senior positions in your organisation and on its board. If your organisation is yet to develop a diversity policy, it may help to set your commitment to inclusion in stone by articulating your pledge in your annual report.

10. Treat your annual report as a marketing toolApart from being a document required to fulfil regulatory requirements, you should consider your annual report as an extension of your organisation and realise that those who read it are going to draw conclusions about your organisation from it – if your report is well presented, clear, accurate, focused and full of vision and passion, then your organisation will be perceived that way as well. You may consider including a ‘scorecard’ on your organisation at the start of the report, which highlights your three major achievements and quantifies key figures such as volunteer hours and donations.

“If I could say one thing...”

“If I could say one thing about completing your annual report, it would be to start early. You should have an agreed project plan by now and already be meeting at least every fortnight if you are working as part of a team. If you are getting your report professionally designed, you should have your template design approved as soon as possible. Set up any tables and graphs you may be using now so you can input updated information as it becomes available. And photos – if you know an event is coming up, make sure someone is there to capture the moment to ensure you can share the event with your readers. Retrofitting commentary to fit the photos you do have does not work. Also, your cover photo is your chance to make a first impression and draw readers to your report, so plan ahead. And good luck as every year will always produce new challenges, no matter how organised you are!”

Louise Barren is Program Leader – Organisational Planning and Performance at the City Of Kingston and has project managed the council’s annual report for more than five years. The City Of Kingston has been recognised for six consecutive years at the Australasian Reporting Awards as having produced an annual report to a Gold Standard. In 2013, it won the top reporting award, with its 2011/12 annual report awarded Report of the Year in the Public and Not for Profit Organisations category.

The award-winning 2011/12 annual report will automatically download at http://bit.ly/1hS0v52

(PDF 8mb)

WISDOM FROM THE EXPERTS

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What the judges said:

“Transparency was a major feature that made the City of Kingston report the win-ner. The Council’s activities, achievements and challenges are clearly presented in a way that should meet the requirements of all readers – and there is frank discussion about budget variations and performance targets that were not met.”

From left: Adam Awty (Chief Operating Officer, CPA), Ron Brownlees OAM (Former Mayor, City of Kingston), Louise Barren (Program Leader, City of Kingston) and Tim Sheehy (Chairman, Australasian Reporting Awards).

HOT TIP: Because your annual report (hopefully) records a year of achievements, every staff member should be able to contribute to the

project. It is essential that staff, and even relevant volunteers, are asked to keep records – media clippings, photos, ideas for case studies – to support

your achievements. Trying to backtrack and collect year-old information is simply too difficult and can lead

to inadequate or inaccurate information in your report.

AwardsAfter all the effort you will put in to your annual report, why not consider putting it in the running for an award? Winning an award offers deserved recognition and intelligent feedback. It also builds the reputation of your organisation, shows you’re serious about meeting your reporting and compliance obligations, and encourages your team to pursue excellence in annual reporting.

Below are a number of awards to which you may consider submitting your annual report.

Australasian Reporting Awards

http://www.arawards.com.au/

The Australasian Reporting Awards – considered to be the largest and most comprehensive awards process – provide an opportunity for organisations to benchmark their reports against the ARA criteria. The awards are open to all organisations that produce an annual report, including not-for-profit organisations. Organisers are keen to note that the awards are a measure of the standard achieved and are not a competition. There are special award categories for sustainability, governance, work health and safety, integrated reporting, online reporting and communication.

GET RECOGNITION

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PwC Transparency Awards

http://www.pwc.com.au/about-us/corporate-responsibility/transparency-awards/

The PwC Transparency Awards were introduced to Australia in 2007 to recognise the quality and transparency of reporting in the not-for-profit sector. Run in collaboration with the Institute of Chartered Accountants Australia (ICAA) and the Centre for Social Impact (CSI), the awards aim to encourage transparent and high-quality reporting from not-for-profit organisations to stakeholders such as clients, donors, regulators and partners.

Applications will open later this year.

Who should your annual report go to?To increase its usefulness as a marketing tool, your annual report should be made available to a number of groups, including:

• Members

• Sponsors

• Donors

• Volunteers

• Fundraisers

• Business or community partners

• Applicable local councils or local government bodies

• Applicable local state and federal politicians, as well as relevant state or federal ministers

• Grantmakers (send a copy of your annual report with your application where possible)

• Media organisations

• Potential sponsors or partners

• Potential new board or committee members

• Applicable industry organisations or governing bodies

HOT TIP: One organisation in the PwC Transparency Awards included QR codes – barcodes typically used for storing web links or other information that can be read by a smartphone camera – throughout their annual report to offer readers direct access to further information from their phone. “This response to technological advancements is innovative and aids transparency by making relevant information readily accessible,” the judges said.

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Pat’s TipAs it’s time to start preparing your annual report, why not alert all of your members, friends and supporters to the great work that your volunteers have contributed to your organisation? One way you can hit people right between the eyes with this contribution is to allocate a dollar value to each volunteer hour contributed.

Now, we’re not asking you to measure this every day. In fact, we’ve done a lot of the hard work for you. All you need to do is take a typical volunteer day and multiply the number of volunteer hours by the average value of a volunteer – calculated by Our Community in 2013 to be $31.50. Then multiply this out by the number of weeks worked to provide the annual dollar value that your volunteers have contributed.

For example, if you had four volunteers working for eight hours, one day a week, their annual value to your organisation is already more than $50,000.

If you wanted to take this a step further and demonstrate in highly comparable terms what your volunteers have actually saved your organisation, you could estimate how much membership fees would have to increase or how many new sponsors you would need to make up the difference – and then of course detail it in your annual report and at your AGM.

You can find more information on rewarding, recognising and respecting volunteers in this Our Community help sheet.

PATRICK MORIARTY is the Executive Director of the Institute of Community Directors Australia.

Annual report timeline

3 months prior

• Develop content outline/brainstorm ideas

• Finalise draft plan

• Prepare detailed schedule

• Recruit sponsors

6 weeks prior2.5 months prior 2 months prior

DUE DATE 4 weeks prior1 week prior 3 weeks prior

• Hold initial project/committee meeting

• Choose printer

• Receive submissions from board members, committee chairs, staff, volunteers (send reminder 5 days before)

• Receive financial information

• Draft & refine content

• Approve initial design• Final review/

proofreading

• Board to approve final copy • Send to printer

• Distribution/delivery of finished reports

• Publish online version

• Annual General Meeting

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Top 5 annual reportsBEST ONLINE REPORT

UK National Trusthttp://www.nationaltrustannualreport.org.uk/

The UK’s National Trust released its first fully interactive, digital annual report in 2012/13. Aimed at improving the readability of its print counterpart, the online version showcases a rich collection of photography and video messages from the Chair and CEO. Individual sections of the full report can also be downloaded or viewed online. The National Trust’s project coordinator Sue Cassell has previously told Board Builder that one of the main challenges in this type of reporting is ensuring the accuracy, quality and integrity of the product in both print and online. But the results speak for themselves.

BEST USE OF CASE STUDIES

Brotherhood of St Laurencehttp://www.bsl.org.au/pdfs/BSL_AR2013_web.pdf

The Brotherhood of St Laurence’s 2013 annual report makes great use of case studies to highlight individuals that have benefited from its services. Six separate case studies are previewed on page two and then interspersed throughout the report, alongside a report about the corresponding service or project the organisation provides. The report highlights tangible outcomes such as “The Youth Foyer has provided Kieran with stable accommodation and access to education in a supportive environment” and “Thanks to the Brotherhood’s Work and Learning Centre Linda was able to find work in the aged-care industry”.

BEST USE OF STATISTICS

CanTeen Australiahttp://issuu.com/canteenaus/docs/canteen_annual_report_2013

While useful statistics are scattered through this 2013 annual report from CanTeen, this graphic outlining its achievements for the year is particularly striking. Consider the following paragraph:

“By 2012, five YCS (Youth Cancer Services) were operating in major hospitals across the country with multidisciplinary teams of medical, nursing and psychosocial specialists directly helping almost 225 young cancer patients per year. Between 2009 and 2012, almost 900 patients were treated directly by the Services with another 1800 patients supported in other hospitals by YCS staff.”

Such a simple, concise statement immediately gives you an idea of the extent of their service and reach into the community. It’s important to set out your message clearly in simple terms and think in terms of a poster or a headline, not a thesis.

GET INSPIRATION

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BEST OVERALL

Camp Quality

http://www.campquality.org.au/media/685047/executive%20summary.pdf

Camp Quality was awarded a PwC Transparency Award for the quality and transparency of reporting in its 2010 annual report. The judges commented that: “Camp Quality’s annual report is extremely impressive in all aspects. It would be a most useful document for stakeholders and staff alike. The design and articulation of strategies and the efforts made to describe and measure outputs and impacts are commendable.” The bright design of the report certainly lives up to the organisation’s philosophy of ‘fun therapy’ and text elements, particularly the CEO and Chair’s messages, are kept brief to reflect the organisation’s younger audience. The organisation also keeps financial and fundraising information very simple and recognises its volunteers through a profile and by quantifying their contribution: “Together 2054 volunteers spent 2392 hours a week creating an organisation that delivers awesome programs and services for children living with cancer and their families.”

BEST NEWCOMER / COMPACT FORMAT

Good Beginnings Australiahttp://www.goodbeginnings.org.au/content/upload/files/annual_report_2012/GBA%202pp%20exec%20summary.pdf

Good Beginnings Australia – a national charity working to build better outcomes for children living in vulnerable communities – took out the Best First Time Entrant award at the 2012 PwC Transparency Awards. The organisation explains that it has worked for several years to improve and create effective communications for its stakeholders and this is evident in its adaptation of the postcard format. The organisation created a snapshot two-page annual report, with a link to the full report – which is almost 160 pages – online. The organisation’s head of development, Michael Thompson, provides this tip for annual report success: “Transparency and accountability require a commitment from all staff, no matter what their role.”

THEY SAID IT:

“Nobody is bored when he is trying to make something that is beautiful, or to discover something that is true.”

— William Inge

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The law, state by state:The following table will help you determine what legally needs to go in your annual report.

There may also be provisions governing reporting in your own constitution; look it up.

You will also have reporting responsibilities to your members. The exact terms of these responsibilities vary slightly from state to state, but are similar in outline.

Annual report

ACT At each Annual General Meeting of an incorporated association the following documents must be

presented by the committee for the consideration of the meeting:

(a) the audited statement of the association’s accounts for the most recently ended financial year of the association;

(b) a copy of the auditor’s report to the association in relation to the association’s accounts for that financial year;

(c) a report signed by two members of the committee stating —

(i) the name of each member of the committee of the association during the most recently ended financial year of the association and, if different, at the date of the report; and

(ii) the principal activities of the association during the most recently ended financial year and any significant change in the nature of those activities that occurred during that financial year; and

(iii) the net profit or loss of the association for the most recently ended financial year.

NSW At each Annual General Meeting of a Tier 1 association, the association’s committee must cause:

(a) the association’s financial statements for the previous financial year, and

(b) the auditor’s report for those statements,

to be submitted to the meeting.

At each Annual General Meeting of a Tier 2 association, the association’s committee must cause the association’s financial statements for the previous financial year to be submitted to the meeting.

Tier 3 associations don’t have to report at all unless they want to.

NT In the Northern Territory, the laws are identical to the ACT.

QLD For level 1 and some level 2 associations the members of the management committee must ensure the association, within six months after the end date of each financial year —

(a) prepares a financial statement for its last reportable financial year; and

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QLD (b) has the financial statement audited by —

(i) for a level 1 incorporated association — an auditor or an accountant; or

(ii) for a level 2 or level 3 incorporated association mentioned in subsection (1)(b) or (c) — an auditor, an accountant, or an approved person; and

(c) presents the financial statement and the signed report on the audit (audit report) to the association’s Annual General Meeting for adoption.

For other level 2 incorporated associations that are not required to have an audit conducted under the Collections Act 1966, the Gaming Machine Act 1991 or under any law for any other purpose the members of the management committee must ensure the association, within 6 months after the end date of each financial year —

(a) prepares a financial statement for its last reportable financial year; and

(b) presents to the association’s Annual General Meeting for adoption —

(i) the financial statement; and

(ii) a statement signed by an auditor, an accountant, or an approved person, that states —

(1) the person has sighted the association’s financial records; and

(2) the association’s financial records show that the association has bookkeeping processes in place to adequately record the association’s income and expenditure and dealings with its assets and liabilities.

For Level 3 incorporated associations that aren’t required to have an audit conducted under the Collections Act 1966, the Gaming Machine Act 1991 or under any law for any other purpose, the members of the management committee must ensure the association, within six months after the end date of each financial year —

(a) prepares a financial statement for its last reportable financial year; and

(b) presents to the association’s annual general meeting for adoption —

(i) the financial statement; and

(ii) a statement signed by the association’s president or treasurer that states the association keeps financial records in a way that properly records the association’s income and expenditure and dealings with its assets and liabilities.

SA A prescribed association (income over $200,000) has a very long list of things to do, which you can find here. If you’re not prescribed, you can follow your own wishes in this matter.

TAS In Tasmania, you have reporting obligations to Consumer Affairs and Fair Trading Tasmania, but not to

your members.

VIC At the Annual General Meeting of an association, the committee must submit to the members the

financial statements for that financial year.

The financial statements must —

(a) give a true and fair view of the financial position and performance of the association during and at the end of its last financial year; and

(b) have attached a certificate in the prescribed form signed by two members of the committee certifying that that is the case.

WA An incorporated association shall submit to its members at the Annual General Meeting of the

association accounts of the association showing the financial position of the association at the end of the immediately preceding financial year.

If you are a registered charity, you also have to heed the reporting guidelines laid down by the Australian Charities and Not-for-Profits Commission (which at the time of going to print is still hanging in there). Reporting obligations include submitting an Annual Information Statement (AIS) and, depending on the size of your charity, an Annual Financial Report. You can find the full reporting guidelines here.

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Annual report checklistPlanning

Have you:• Appointed a project manager or assigned responsibility

to one person?

• Determined if you have a committee, such as a communications and marketing committee, to lead the process?

• Established the due date?

• Plotted deadlines on your calendar and established a timeline?

• Held an initial meeting to brainstorm ideas and key messages?

• Notified those that will be responsible for providing content – board members, committee chairs, staff or volunteers?

• Notified your treasurer of what financial information will be required and by when?

• Identified who will provide the final approval of content?

• Determined what photographs are available and arranged and coordinated others if required?

Audience

Will your annual report be:• Printed, with hard copies sent to your mailing list?

• A postcard, with links to the digital version of the report?

• Online or digital only?

• Video?

• Posted on social media?

• An email containing a PDF attachment or notification of the online version?

• A combination of the above?

Content

Does your annual report contain:• Mission statement

• Chair / CEO’s message (keep these as brief and lively as possible)

• Committee reports

• Accomplishments / key achievements

• Financial statements

• Thank you messages – donors, volunteers, members, grantmakers, sponsors, contributors

• Case studies

• All regulatory and legal requirements (see page 8)

• Future plans

Planning

Audience

Content

Review

Design

Production

Next Steps

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Review

Does your annual report:• Make use of as many relevant statistics as possible?

• Focus on quality, not quantity?

• Avoid the use of complex words?

• Contain content that is clear, concise, consistent, upbeat and honest?

• Contain contact details and information about how people can volunteer, donate, sponsor or get more information about your organisation?

• Explain how your organisation is constituted and governed and outline the corporate structure of your organisation, including details of board members and senior management?

Have you:• Triple checked facts and figures, the spelling of names and the accuracy of captions?

• Had the report proofread by at least two people?

• Sought permission from donors before publishing personal details?

• Simplified complex financial information by the use of tables, charts and lists that are immediately understandable to the everyday reader?

• Asked your treasurer to ensure all financial information is clear and accurate?

Design

• Do you have a professional designer (if necessary and your budget permits) or a volunteer?

• Is the cover attractive and professional, with a striking image? Does it have a similar feel to your other documents?

• Have you made use of descriptive headings to improve readability and promote scanning?

• Is the use of fonts and colours consistent?

• Have you included high-quality photos and graphics with compelling captions?

Production

• Approach a printer for sponsorship or a quote

• Decide on print quantities

• Select a printer and confirm delivery date

• Send a report to board for final approval

• Review proofs if necessary

• Take delivery of annual reports

• Mail annual reports (if necessary) and distribute online

Next steps

Have you:• Decided who will present the report at your AGM?

• Considered entering your report into an annual report competition?

• Gathered feedback on what worked and what didn’t?

• Made a plan to record information and events over the coming year to include in your next report?

• Thanked sponsors?

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We want the cover photo of our annual report to show we’re an

innovative service provider with a great story to tell and a vibrant

community support base. We want to reach a young online audience with an

edgy graphic presentation so they’ll keep reading past page 1.

The Takeaway:

(1) Tell a story in pictures. Nobody reads the stuff in between (but check for typos anyway)

(2) Don’t waste space on pictures of the board (particularly when these show up your lack of diversity)

Bad Board Inc

Communities in Control ConferenceMay 26 & 27, MELBOURNE

Australia’s most inspiring social movement - the biggest and best annual not-for-profit sector gathering.

www.ourcommunity.com.au/cic2014

Board Builder is the membership publication of the Institute of Community Directors Australia. An Our Community enterprise, the Institute is the best practice governance network for the members of Australian not-for-profit boards, committees and councils, and the senior staff members who work alongside them. Membership starts at just $65 per year. Become a member at www.communitydirectors.com.au/icda/subscribe/.

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