7 Reasons You Should Produce an Annual Report

Hopefully 2012 is off to an outstanding start for you and your ministry. And as exciting as it is to look ahead to 2012, it is vital that you review with your people the ministry successes of 2011.

January and February are the months companies are required to release to their investors annual reports on the previous year. You will note that many non-profits and churches have learned the value and are doing the same.

But rather than the staid format of spreadsheets and statistics, it is imperative to tell the success story of your ministry through compelling images, stories and graphics.

Why should you invest the time and energy to compile such a report? Here are 7 reasons to do so:

1. Communicate to your entire audience (not just to those who give) – you are already preparing and sending a year-end giving statement to givers. (It is required by the IRS after all.) If you’re smart, you are creating a one-page cover letter that accompanies the statement, reflecting on the previous year while thanking those who gave to support the ministry. But who receives this mailing? In my experience, most churches only send this mailing to those who actually gave money to the church. That means, if your giving statistics are average, that approximately 30-50% of those who attend your church did not receive anything at all – because they didn’t give. They miss the cover letter that shared the success stories! The annual report should be delivered to every household that you believe is connected to your ministry, whether they gave or not. (Your quarterly statements with a great cover letter should also be going to every household, whether they gave or not…just sayin’).
2. Confirm the wise investment of your donors. While a cover letter accompanying a giving statement is wise, it doesn’t allow enough space to tell the full story. The annual report allows you room to talk in detail about successes in all of your ministry areas. It says to the giver, “your continued investment is a wise one – look at how effectively we are stewarding your resources for maximum Kingdom impact locally and beyond our walls.”
3. Celebrate the outcomes of your ministries. Use this opportunity to bring all of the little stories from the year together to form the larger story. Celebrate all that God is enabling your church to accomplish. Tell stories. Use photos from baptisms. Celebrate those whose lives are back on track as a result of your Celebrate Recovery ministry. Rejoice in the lives impacted through your benevolence ministry. By the time one is finished reviewing the report, they will be overwhelmed by all the things your ministry has accomplished through the year. It will motivate ongoing support and will likely stir new gifts from some who have never given before.
4. Connect the dots between donor generosity and your ministry. This is a big one. Unfortunately, most view giving to the church as supporting the budget, paying the bills, turning on the lights, compensating staff. Every time you share ministry success, you are changing the focus from funding a budget, to changing a life. You are saying that it’s not about the need of the church to receive your money, but it’s about the need of a Christ follower to be generous. It’s not about what we want from you, it’s what we want for you. You are helping your church see their giving making a difference – and that’s a lot more compelling to your people than the feeling that they’re giving is paying the next utility bill.
5. Cheer those who give and encourage those who don’t. Applaud those who give! Honor them with praise. Encourage their continued generosity. Make it a teachable moment – disciple your people. Reaffirm those who give and encourage those who don’t to step out in faith and begin.
6. Create trust through transparency. Trust. There is nothing harder to gain. There is nothing easier to lose – especially when it comes to money in the church. The media pounces on every failure in church leadership that involves financial impropriety. Through the transparency of your annual report, you are saying we have nothing to hide. You account for every dollar in and every dollar out. You don’t need to share detailed spreadsheets – most won’t study them or understand them. Share the bigger picture and invite those who desire the detail to come in for a complete and thorough review of the books. If you have established trust, you won’t have a single request. They trust you and the elected lay leaders who provide oversight of your operations.
7. Capitalize on connections (with new people, visitors). The annual report gives yet another glimpse inside your culture to those who are considering a visit to your church. Yes – I am suggesting that your annual report be accessible online through your website. Why not? Don’t you want prospective visitors to view your previous year, your ministry successes and your proper stewardship of gifts? Absolutely you do!

This will take time. Creating an effective report is not easy the first year, but future reports come together more quickly in successive years. Honor those who support your ministry by providing an annual report for their review.

Next I will offer some excellent examples of church annual reports that will serve as models upon which you can build.