Five dimensions of effectiveness for nonprofit annual reports

Annual reports are an important communication device through which nonprofit entities can satisfy their duty to be accountable to donors and the public at large. The primary objective of this article is to identify best practices for annual reports based on five dimensions: completeness, accessibility, transparency, full disclosure, and relevance. This article reports on both the financial and nonfinancial content in voluntarily provided annual reports. Based on our survey, we include recommendations and examples to help nonprofit leaders improve communication with stakeholders. While many of the recommendations can be adopted at little or no additional cost, achieving the most important criterion, relevance, will require nonprofit leaders to substantially improve their reporting of organizational goals and accomplishments.