Why Annual Reports?

Earlier in November, a coalition of outfits including the Communications Network, the Philanthropy Awareness Initiative, and the Williams Group published a really interesting report questioning the value of the annual reports produced by philanthrophic foundations: Talking to Ourselves? A Critical Look at Annual Reports in Foundation Communications.  The good: the study was motivated by a terrific question (are annual reports worth the effort?) and they nailed some important insights.  The bad: a little too much straw man in the study’s actual research questions, even though their conclusions all seem pretty sound.  What do I mean?  One of the key questions they asked: how many people actually read the annual reports published by foundations?  The answer, predictably, is not many.  They get points for not assessing readership among the entire American public, and instead measuring it among an “engaged public.”  But this narrower “engaged public” audience was still made of up tens of millions of people, and it hardly seems fair or useful to judge recall or brand awareness of any particular foundation against an audience of that size.  The issue seems to me like a classic communications challenge: identify precisely who your audience is and what you hope to accomplish, develop a strategy for accomplishing those specific outcomes with those specific audiences, measure effectiveness, and adjust.  It’s tough to see why very many foundations, if any, would see their strategically targeted audience as including 12% of the American population.

Another example: the report assembles all of the annual report objectives noted by their survey respondents and then criticizes foundations for trying to do too much.  I suspect that many foundations really do try to accomplish too many objectives with their annual report, but I might have approached this question a little differently.

That said, it requires some guts to to take on a deeply established practice, these folks did a lot of work in asking the question, and they a good starting a valuable conversation.  One particularly interesting finding is the internal value of the annual report process that many foundations identified.  Creating an annual report resulted in “significant internal benefits for their foundation, prompting a regular chance for reflection, creating a communications discipline, and generating new content that can be repurposed in other vehicles.”

Research question quibbles aside, the report does ask a tough, important question – is it worthwhile? – about a widespread, inertia-bound foundation practice, and their conclusions are spot-on: foundation communications tools  should be targeted and strategic rather than broadband, foundations should measure impact of those tools, most people don’t find annual reports valuable, and skipping the annual report process can save a foundation substantial cash, time, and environmental impacts.  And the report generated some good – and ongoing – online chatter, including Philantopic‘s comments and a post on the Public Policy Communicators of New York blog highlighting the upcoming “no-holds barred online conversation” about the report.

They clearly mean for their report to be the beginning of a conversation.  Hats off to them for asking the question, doing the research, and inviting the engagement.  You can learn more and plug in to the conversation at the WhyAnnualReports.org website.

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