vintage typistTwo weeks ago, I wrote a suite of annual report templates for a nonprofit client whom I really like. I enjoyed the whole assignment, and the writing flowed easily.

I have thought some more about it since and came to the conclusion that it’s not just the client; it’s also the nature of the work. So here’s why I love writing annual reports for nonprofits.

Describing value in annual reports

Most annual report writing is designed to describe clearly to shareholders or stakeholders the value that the organisation has created in the past year. (I would like to say all annual report writing is like that, but some of them are designed to obscure what happened).

It is at this very thing – the creation of value – that nonprofits with good missions and values and an excellent team of staff and volunteers excel. They shine at creating value.

early word processing 07.01.2013

Private companies also create value, but it is partly diluted back to individual shareholders in the form of dividends and the type of waste that happens in big corporations.

Since the commencement of the industrial revolution at least, the value that nonprofits create has been painted as secondary to the value created by commercial  enterprise. After all, it is companies like the Dutch East India Company that changed the face of the world forever with the establishment and warring over trade; in the context of such behaviour, it is inevitable that nonprofits will be required to be established to follow along in their wake, ministering to the injured, grieving and poverty-stricken societies and peoples left behind.

Nonprofits these days are undervalued for two reasons: the measurement tool for value is utterly dysfunctional, and the value we first-world people place on the lives of others in developing countries is soaked in hubris.

It is the business of churches, social workers, writers, artists and doctors to hold that conversation about the worth of other human lives. It is my opinion that we walk with a squint and think with distorted confidence where it comes to race, class and the worth of other people, but that is a thought for another day.

Measurement & distortion

The first problem – measurement – is something I can discuss and change as part of my working life, which is what I have chosen to do in the establishment of Report Machine.

house raising nfpTraditional commercial value is expressed in monetary terms. The core unit of measurement of a company is dollars, and its objectives and health are expressed as profit, share price, sales, EBITDA and other frameworks in the constellation of capital value.

However, as the old saw goes, when all you have is a hammer, everything looks like a nail.

Money is only one way of accounting for value. If you only account for things expressed in terms of money, your accounting will be distorted.

The flow-on effect of the distortions of the conventional measurement and accounting methods include massive oversights in the value of female labour, volunteer labour, industrial labour, healthy physical surroundings and healthy communities, education, culture and ritual.

(What’s wrong with distortion? I hear you ask – we all like movies, fairy tales and optical illusions. There’s nothing wrong with it, but it causes a lot of economic waste and human misery).

I like writing for nonprofits because the amount and scope of value they create is immense – I’m never short of topics or ideas to write about; it’s always about culling rather than trying to pad things out.

landcare picHere’s an illustration

In a hypothetical organisation that helps long-term unemployed people get jobs, I’m calling it As Long as a Piece of String (ALPS). There’s a jobseeker, let’s call her Anouk. She’s an experienced biochemist but her English won’t allow her to function in her former role from her place of birth. She has two teenage sons and her husband is a mechanic.

Here’s the value created in just the case of Anouk:

1. Counselling

Anouk thought she would never work again when she came to Australia. She was starting to internalise the idea that she is not smart, because she gets rejected by recruiters who shout at her because she can’t understand what they are saying – mostly because they use a lot of slang.  The counsellors at ALPS talked to her about her feelings about her work and what she likes about it. Apart from getting her more work-ready, it also had a knock-on effect, giving her confidence when dealing with new people and gave her some key insights into the tertiary education system, helping her to apply for a valuable certification.

2. Case management

The case manager at ALPS enquired at a couple of schools where there was a high number of students who speak the same first language as Anouk. The schools she spoke had nothing, but one of them found out about ALPS, and placed a different jobseeker from ALPS  in their sports coaching staff. They told the case manager that a local private hospital was looking for somebody to help the doctors and pharmacists interpret for the patients and their carers and supervise their medications. Not as senior a role as Anouk used to have, but still good for her family and her feelings of self-worth.

3. Advocacy

The communications coordinator at ALPS wrote a media package that featured Anouk’s story. The social media side of it went viral in a small corner of Melbourne and inspired a young entrepreneur to start an interpreting service specialising in technical information for consumers and communities – legal, medical, financial, bureaucratic. The firm ended up employing and providing superannuation for six people.

With Anouk’s new confidence, Anouk’s two sons also completed their education, getting places in university and jobs in the local community. Anouk and her husband were able to fly to the country of their birth to attend his father’s funeral.

poverty shouldnt be a life sentenceAttributing value in a vaguely commercial way

Let’s add it up in the way a private enterprise would:

Overheads: second-rate office in suburbs, $20,000 per annum, plus outgoings, wages etc. Wages usually not as high as private enterprise and there is a culture of cost-saving.

Value outputted:

1. Counselling – tangible:  reduced medical costs due to averting depression in Anouk, tertiary fees committed to over four years; intangible – made a whole family well and less stressed

2. Case management-tangible: placed two people in jobs, earning $30,000 each more than they did before, this money in turn flows into the economy, supporting more jobs in supermarkets, factories and cafes. It increased the health and recovery for the hospital’s patients by the new accuracy in medications. Intangible – increased the self-worth of two different people, eased the pain of hospital patients not taking their medications correctly (including unknowingly preventing a death), increased the strength and skill of the school’s soccer team.

3. Advocacy. Tangible: thousands of people who saw the campaign let it enter their minds that it was possible to get work even though they had previously thought it was hopeless; hundreds of them mentioned it to a friend or relative; thirty people actively intervened with a family member and took them to see an intake person at ALPS, of which ten were immediately placed in basic jobs and the others into a specialised jobseeker program. That’s $300,000 in instant new income from this group, with more to come. The entrepreneur’s new service generated work for six people, and helped resolve countless legal disputes, saving people money, and held workshops showing new migrants how to keep their lawns cut so they don’t irritate the property managers of their rented homes – again saving money and distress.

muslim woman reading to sonCommercial value versus nonprofit value

In private business, the boundaries of what constitutes value are set: whatever creates stable, long-term profits and suitable returns for investors.

For the not-for-profit world, the value they create is as diverse as the stakeholders, because their activities are targeted to fill specific needs rather than the generalised profit objective.  This means that annual reports, which account for their creation of value in the preceding year, need to continuously return to the organisation’s relationship with its clients and stakeholders.

Communications, public relations and marketing, in private industry, is a function of sales; in nonprofits, it’s not just a function of ‘sales’, it’s core to the value equation.

At this point, I’ve left out a vital ingredient in the creation of value in nonprofits, in that it has ‘supply-side’ value: service to other human beings as part of service to God or Allah, or for the greater good generally. But that is a post for another day.

Me cropped

Jenny MacKinnon is the owner and chief writer and editor at Report Machine. You can contact her by emailing or @jennylmackinnon on Twitter and ADN.



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