Annual reports are the wrap that often surrounds an agency’s financial statements. Like a warm wool coat on a cold day, this wrap can be both functional and stylish. The most important function for an annual report is to disclose the agency’s financial health in the published financial statements. As discussed in Chapter Eight, financial statements report actual income and earnings for a particular time period, namely the agency’s fiscal year (which may or may not coincide with the calendar year). Annual reports also frequently contain information about a nonprofit agency’s current programs and describe the successes achieved in the previous year. They present another opportunity for conveying an agency’s story. Like brochures and Web sites, annual reports use words, photographs, and graphics in delivering information. Like capital campaign statements, annual reports come in all shapes, sizes, and degrees of decorativeness. And like grant proposals, they tell a story. Who is better qualified to tell that story than someone who has learned the craft by writing proposals?