Your books are not a secret.
First and foremost, you report annually to the IRS with your 990 form (if your budget is greater than $25,000). The non-profit GuideStar.org makes searching those forms easy for donors. Whether you know it or not, it only takes a couple minutes for donors to find recent information.
But why force them to go scouting? You want to instill confidence in your donors with how you spend their gift to you. Before annual reports became obsessively bloated, they used to actually, you know … report.
As managing director of the Grand Cinema we didn’t publish a formal annual report, so instead we gave very high-level reports to our members at the Annual Meeting: the big areas of profit (movies, concessions, memberships, donations, etc), the big areas of expenses (cost of movies and concessions, staff, building costs, marketing, etc), plus a very general balance sheet. A lot of non-profits are wary to give this information out, but keep in mind that any donor can find it out anyway. By sending the data out yourself, you can include with it a letter from your treasurer or board president explaining the numbers.
Most donors could not care less. But for those who do, this is an important way to signal that you are a good steward of their money.
