A useful template for building an impact report: The dos and don’ts

Impact reports are an essential tool for nonprofits to share their progress with stakeholders. Despite that, a lot of organisations don’t know how impact reports differ from annual reports, how they should be used or how to create one.

In this article, we’ll break down the basics of impact reporting, including why they’re essential and how any nonprofit can create an impact report with a few dos and don’ts.

What is an impact report?

An impact report is a document or presentation that showcases the measurable outcomes of an organisation’s work. Typically, the outcomes are from specific initiatives or programs over a distinct period of time.

What are the benefits of impact reports?

Impact reports can be strategic for nonprofits for a few reasons. While every organisation is different, most nonprofits use impact reports to:

Build trust: An impact report shows how funds and resources were used to make a difference, helping build trust with stakeholders (donors, board members and the community).

Strengthen relationships: Impact reports show donors and supporters exactly why they’re so important to your mission, making them feel appreciated and valued.

Make strategic decisions: The process of gathering insights and outcomes from specific initiatives allows nonprofits to take a deep dive into what worked and what didn’t — and make strategic decisions in the future.

Raise funds: Clearly demonstrating the results of past investments can encourage further donations and/or partnerships.

What’s the difference between an annual report vs impact report?

Annual reports and impact reports are often confused with one another, but they are distinctly different.

While an impact report shows the outcomes of specific initiatives or programs, often focusing on a specific period of time, an annual report acts as a year-in-review for nonprofits, usually covering several different initiatives, programs and more.

For example, Girls’ Inc.’s annual report from 2023 offers an in-depth glance at their entire year — including the organisation’s financials. An impact report, however, might focus on a smaller, more defined period of time and hone in on a few specific initiatives or programs rather than an entire year’s worth.

How to create an impact report

Do: Keep your purpose and audience in mind

Unlike an annual report, which is often created for a very broad audience — including donors, partners and other stakeholders — impact reports are often more specific and focused.

When creating your impact report, be sure to determine your primary goal and target audience so you can craft it correctly. For example, if your impact report is designed for a partner organisation, you might not want to focus on initiatives made possible by donations from the general public.

Do: Include qualitative insights

Many nonprofits get hung up on quantitative insights and hard numbers (metrics like the number of people served or funds utilised).

While those are important to include, it is equally important to include qualitative insights like beneficiary stories, survey results, testimonials and more. This can help create a more emotional connection and provide a more holistic view of your impact.

Do: Make it simple

Regardless of your audience, your impact report must be as reader-friendly as possible. This will ensure that stakeholders read and understand the report.

To do this, use plenty of headings, bullet points and visuals (think photos, graphics and more).

Do: Restate mission and goals

Whether your audience is a long-time partner or a brand-new supporter, it’s always best practice to remind them of your mission and goals at the beginning of your report.

This helps refresh readers of your values and provides a foundation for the rest of the impact report.

Don’t: Be afraid to admit setbacks

No nonprofit is perfect. So, when creating your impact report, don’t shy away from mentioning where improvements could be made or where things went wrong.

In doing so, you’ll show supporters that you are committed to trust, transparency and honesty.

Don’t: Make it boring

No one wants to read a long, text-based impact report.

Instead, use storytelling techniques to share data and inform supporters about your progress with photos, diagrams and even videos (if you’re going the digital impact report route). This will allow supporters to have a more immersive experience and feel much more connected to your mission.

Don’t: Forget context

Many nonprofits just list activities or outputs (e.g., “We held 20 workshops”) without providing any additional information about the outcomes or why they are important.

Instead, offer insight into the differences your activities or investments made (e.g., “95% of workshop participants reported improved financial literacy skills which directly translated to more savings”).

An impact report can be an incredibly useful tool for a nonprofit organisation. Use these tips above to create your next report, and show your community your progress and impact.