Before You Do Another Annual Report...

(Bruce Trachtenberg is executive director of the Communications Network, a nonprofit that works to provide resources, guidance, and leadership to advance the strategic practice of communications in philanthropy. He is also an occasional contributor to and frequent commenter here at PhilanTopic. Bruce published the following post last week on the Network's blog.)

My first job in philanthropy had me handling communications for two foundations that had been set up by a husband and wife to serve their personal philanthropic interests. These foundations shared staff and functions such as finance, legal, and communications, but not annual reports. Each foundation had to have its own.

Over eight years, my challenge -- beyond the tiring aspect of producing not one, but two reports annually -- was convincing the directors of the two foundations that the reports being planned for each of them would be of equal quality and importance, and neither was getting favored treatment. Only years later did it occur to me that we were putting more emphasis on satisfying ourselves than audiences outside the foundation.

That lesson is similarly echoed in a newly released research report, Talking to Ourselves? A Critical Look at Annual Reports in Foundation Communications, which is now available online in magazine format or here as a pdf. Co-produced by the Philanthropy Awareness Initiative, the Williams Group, and the Communications Network, the report grew out of a very lively session held during our 2008 annual conference in Chicago. The session was organized around questions such as:

• Are traditional foundation annual reports a thing of the past? Or do they still serve a purpose, and if so, what?
• Isn't there a better way to communicate about a foundation’s work?

While we had a spirited conversation in Chicago, there's still much more we can discuss. The report and a companion Web site, WhyAnnualReports.org, are meant to give people a way to pick up the conversation and, like the subtitle of the report says, take a critical look at annual reports. As you'll see, the site has been designed to let people speak their minds and raise questions about annual reports.

Why is it important to have this discussion? For the simple reason that communications matters more than ever for foundations, and to be strategic means making the best use of all your resources in ways that advance programs, goals, and missions.

Annual reports deserve credit for all they've done to help foundations be more transparent. But over the years they seem to have been saddled with an unrealistic expectation that they can also serve larger strategic communication goals. It's likely that the work annual reports are expected to do might be better accomplished in other, more effective, and perhaps less costly and time-consuming ways.

As a co-producer of Talking to Ourselves?, the Communications Network is not campaigning to abolish annual reports but rather to get people talking. We want people to offer their thoughts, share their experiences, and to comment on the overall question about whether annual reports -- in print, digitally, or some kind of hybrid form -- serve a purpose. If the answer is no, let's hear what people are doing differently. We also want those who see value in annual reports to have their say about what works for them.

To get things started, we recently distributed copies of Talking to Ourselves? to a handful of reviewers. We asked for comments about the report itself and the state of annual reporting. We have begun posting what they had to say on WhyAnnualReports.org. From these early comments, it's clear opinion is still mixed. Some say (again) that it’s time to stop publishing annual reports, while others strongly disagree.

Here are some sample comments:

Your history either matters or it doesn't. Publishing an annual report forces your organization to annually select and compile information about its work, its people, its grantees, its finances, and other things that matter to most organizations that have a past and a future.

The report has us thinking about all aspects of our annual report, from content to cost to raison d’etre. At the most, it could change the way we talk about our foundation, promote our work, and curate our history.

Foundations put them out because it’s always been done that way. Once upon a time, this was a really good thing. Foundations that put out annual reports were seen as transparent, communicative, and at the vanguard of engaging people outside their hallowed halls. It was good practice. Needless to say, times have changed.

The takeaway from the research that it would best to move the information contained in annual reports to the Web begs the question: How do you get engaged citizens and decision-makers to the Web site?

What do you think? Are annual reports still relevant? Or foundations that publish them just talking to and about themselves? Join the conversation -- below or at the WhyAnnualReports site.

-- Bruce Trachtenberg