02 9370 6200
Understanding the role of PR in financial reports for NFP organisations
For not-for-profit (NFP) organisations, understanding how to present your financial reports is crucial. Accurate and accessible financial reporting is essential to maintain credibility and build trust with potential donors, stakeholders, and regulatory authorities.
But more than just providing the data and numbers, how you report your financials in your annual report is also a highly effective way to conduct PR for your NFP organisation and attract vital financial support – not to mention positioning the organisation in a positive light.
There is no legal obligation to publish an annual report booklet, glossy, online or otherwise, but of course, it is a great PR document for your organisation and lets you present your mission and activities succinctly and professionally.
While it is important to include financial information, we’d encourage you not to include your full audited accounts but rather a more ‘infographic’ approach to the information.
So what areas should you be highlighting in the finance section of your annual report to showcase your organisation?
1. Sources of revenue and key financial performance indicators
Your financial report should include the organisation’s various revenue streams like grants, funding and donations to highlight the diversification of income streams and the stability of your financial support.
You can also use the financial report to identify the organisation’s key financial performance indicators to support potential donors and investors in assessing your NFP organisation’s financial status and efficiency.
Using charts can help show a story of growth or stability over a number of years and you can slice and dice the information to suit the story you want to tell.
There’s no need to stick to strictly financial indicators either – you can show your utilisation, occupancy, outcomes and outputs, whatever the meaningful measures might be for your organisation.
Whatever your financial performance indicators are, depending on specific requirements, they can be a great inclusion for financial reports.
Take care not to get too detailed – the purpose of sharing financial information is to tell a story, not to show and tell everything.
Be selective and tell the story you want to share.
2. Fund utilisation and impact
Donors are the lifeblood of many NFPs. But making sure your donors are confident in the utilisation of their funds is highly important in securing their future support and encouraging accountability and transparency within your organisation.
Using your financial reports is an effective method of communicating how you use donor funding, provided your organisation has adequate ways to track and measure it.
Consider including the following in your financial reports:
– Showcase your program and activity efforts: Outline where your funds are allocated across the organisation’s various programs and/or activities in support of its overall objective and purpose. Use this to show off what you have and highlight what you want next.
– The cost-effectiveness of your activities: Measuring how much funding is being spent to achieve the organisational objectives, how the budget is developed and reviewed, how cash flow and forecasting are managed and how any financial challenges are dealt with.
– Long-term sustainability: What’s the organisation’s longevity like? Are there any plans for the organisation’s future, such as growth strategies and opportunities for diversifying revenue?
3. Compliance and regulatory reporting
Compliance with accounting standards and regulations specific to Australia is crucial for your organisation’s integrity and credibility. Your financial reports can include segments highlighting the compliance methods your organisation conducts in order to maintain compliance across relevant regulations such as the ACNC, the ACCC and the Australian Accounting Standards (AASB).
You can also take the opportunity to showcase the organisation’s adherence to relevant legal and ethical requirements, such as tax laws, fundraising regulations and ethical guidelines, as well as implemented governance practices and structures, board oversight and company procedures.
While your financial report is an ideal opportunity to talk up your organisation’s good points, you also need to be objective and transparent.
Including an insight into your organisation’s risk management approach – from identification to mitigation – will help external stakeholders see the protective strategies in place to address overall risks and safeguard stakeholder investments.
Financial reporting doesn't need to be dull
Your financial reports can be a fun, engaging way to talk up all the amazing activities being performed within your NFP organisation, as well as provide valuable insights into its financial health.
And by using techniques such as data storytelling and visual aids, you can create a finance section in your annual reports that support both the accounting and public relations efforts of your organisation.
Explore more NFP accounting resources here.
