The trouble with annual reports

April 2023
8 min read
by John Schwartz

I’ve been having a bit of trouble with annual reports. I think I’m not the only one.

In April last year, Ruth Levine, then at the Hewlett Foundation, wrote a  blog post  imploring think tanks to stop wasting their money on annual reports.

They make me sad” she wrote, “because I have never once read any of the many thick, glossy annual reports that arrive in the mail.

Now, this caused me problems. On the one hand, Ruth was kind enough to put a link in her post to some of Soapbox’s digital work (thanks!!) and tag us when she tweeted about the post (thanks again!!).

On the other hand, her post appeared on the same day that we had been asked to design an annual report for a major development think tank, and a week after being asked to design the annual report of a big international relations think tank.

Oh dear…

Annual reports can be a beautiful embodiment of your brand identity, like this one for New America. But are they reaching the right audiences?

When annual reports turn bad

I’ve spent rather too much time in the last year having in-depth conversations with think tanks about what they need from annual reports, and I’ve come across the same complaints again and again.

The first complaint is that annual reports are time-consuming and tedious to compile and can be comparatively costly to print and mail out.

The investment in time and money is not the problem per se — it’s about bang for your buck. Many people I talk to about annual reports wonder if their energy would be better spent on high-impact infographics, video or digital marketing content.

The second complaint is that annual reports can involve navigating complex internal politics or indulging in organisational soul searching.

When I have meetings about annual reports, comms officers fret about who needs to be included in sign-off, how to organise projects so they make sense externally but not cause upset internally, and how they should talk about their mission. These are useful and important questions in the context of a high value project such as a rebrand, a website build or an organisational strategy. But do we really want to engage in these debates for the something that doesn’t work well as a marketing item? And do we really want to go over them again every year? No, we do not.

The third complaint is that annual reports don’t function well for their supposed audiences and often nobody at the organisation can identify who they are actually for. One answer is that they are for donors, but sometimes fundraising staff don’t actually use them very much, or don’t want to engage in producing them and some donors prefer other ways to find out about your organisation. Plus the printed or PDF annual report can seem like a relic from the past — surely we need to be digital first these days to reach our audiences?

This dilemma sends a lot of our clients on a sort of perpetual cycle of disappointment. First they do an online annual report but often find it somewhat costly and the analytics somewhat disappointing. Next they do a glossy printed annual report. But again, it doesn’t hit the spot in terms of audience needs. Finally, they give up altogether and do a very basic PDF annual report to meet their reporting obligations. But that leaves staff complaining that they don’t have any good marketing materials, plus there is a feeling that a proper think tank  really should have a proper annual report to showcase its impact. And so the cycle begins again …

When annual reports turn good

Part of the problem is that think tanks can be quite passive in how they use their annual reports. They mail them out to a list of people, have a pile of them in reception, maybe give them out at events and expect the dollars and the engagement to come flooding in.

Life doesn’t work like that.

And while many think tanks struggle with annual reports, there are also many who genuinely do make them work — but that’s because they use them  actively.

I know of one think tank director who takes a copy of the latest annual report to every external meeting. He uses it as a prompt in conversation and an active selling tool, showing people the relevant parts, marking the page for them and placing it in their hands before he goes. And it works, they read the parts he wants them to read, and then they get involved.

And some think tanks have donors who really are very clear that they need to see an annual report. One of our clients gets the vast majority of their funding from a single donor and that donor wants an annual report. You can’t really argue with that.

And, the truth is, that every think tank needs quality content to use in marketing, and also needs some kind of document to tell their story. Smart think tanks reuse content created for the annual report in blog posts, social media campaigns and other marketing activity throughout the year.

Really, you should think about creating your annual report as creating a years worth of marketing materials.

So there are definite audience needs, and think tank annual reports are fulfilling them to a limited degree. But, for a really great annual report we will need to define those needs better and think about how to meet them better.

Deconstructing the annual report

Donors are clearly a vital audience for annual reports, but there are important secondary audiences as well.

For example policy makers, those who work in civil society and prospective staff or partners. For these people, you want to introduce to your organisation in simple, easily digestible ways. Or the engaged public, for whom you might want to showcase your mission and the positive change you make in the world. And then there are internal audiences and academic audiences who want to see particular projects or methodologies showcased or learn about stories of impact.

Let’s deconstruct the annual report. What are we trying to do and how might we do a better job?

We are trying to tell our story and encourage interaction with our organisation

In that case you need your annual report to be a flexible, concise piece of marketing material that gives the basics in a compelling way while encouraging those who want to find out more to do so. You may want this piece to have a longer lifespan than just a year (consider calling it an impact report instead), while being easy to change and reprint if needed. You will want to create a versions of it online as well as in print. Both will need to be a really creative reflection of your brand. That means innovative formats and high quality materials for print, and interactivity and mobile-first design online.

We are trying to do statutory reporting, be transparent about funding and help potential funders with due diligence

Funders want to know how their money has been spent or will be spent, who else funds you, who leads your organisation and what else have they done, what impact your work has had and what kind of things you specialise in.

Keep this information concise, factual and easy to find. You don’t need to do anything else.

We are trying to showcase individual projects

How do you want people to read your document? Should they be sitting forward in their chair (reading for information) or should they be sitting back in their chair (reading for pleasure)?

The annual report is sometimes trying to do two conflicting things: to give information about particular projects or strands of work, while at the same time purporting to be a more reflective thought-leadership document. All the while it is also trying to give a clear impression of who you are and what your brand stands for. You need to think about which of these is your priority.

And don’t feel you need to report on every project. You can also make information about some individual projects available as simple leaflets or information sheets (as well as on your website, of course). You could even design your annual report with a pocket so you can insert separate project sheets into it.

We are trying to position ourselves and express our brand

Separating out the functional elements of the annual report creates a space for thought-leadership and brand positioning.

You want something which will encourage your audiences to sit back in their chairs and engage with your issues on your terms. Something that reflects your brand, is produced at regular intervals, and keeps people coming back for more.

I’m a big fan of quarterly journals. Not academic journals as such — I’m talking about beautifully designed, thoughtful, accessible journals like the ones we produce for  Centre for London  or the  Fabian Society. They provide a different sort of reading space to that of reports or marketing materials — one that allows think tank brands to stake out their own particular piece of intellectual territory.

A similar concept is the rethinking the annual report as a roundup of articles centred around a particular topic. The  On Think Tanks Annual Review  or Chatham House’s annual  Expert Perspectives  are great examples.

OK, that’s great, but should I do an annual report?

For most think tanks annual reports are, in truth, currently, far less effective than they would like — especially given the time, money and effort that goes into them.

The key, is to think strategically about the functions of your annual report and to consciously put it to use — including reusing the content in your other marketing throughout the year.

Here are three things your annual report should do:

  • You’ll need to talk about individual projects or work strands, but you should also develop simple, quick, structured information sheets. They can still be nicely designed and produced, and they should definitely be replicated online. Think about formats that allow you to append these to your annual report.
  • You’ll need reporting, due diligence and financial information that is easy to find in your report and on your website and allows funders to quickly tick the boxes they need to tick.
  • You’ll need it to work as a general marketing piece, something that tells your story and carries your brand. You might consider calling it an impact report, or base it around your organisational strategy or theory of change. But it should be flexible, durable and presented online as well as in print.

And if you are serious about brand positioning:

  • You need your audience to sit back in their chairs and really engage on the subjects where you lead the intellectual and cultural debate. You want them to recognise your brand and keep coming back to the space you have made for reflection and discussion. A beautifully produced and curated journal or an annual roundup is a great way to do this.

John is the founder and CEO of Soapbox. He is based in Bath.

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