Certified Fund Raising Executive (CFRE) Practice Test

What is typically referred to as the annual report?

1. A yearly tax filing document

2. A regularly published summary of financial and program status

3. A detailed project proposal for future funding

4. A collection of donor acknowledgment letters

The correct answer is: A regularly published summary of financial and program status

The annual report is typically defined as a regularly published summary of an organization’s financial and program status over the course of a year. This document serves to communicate the organization's achievements, financial health, and contributions made to its mission. It often includes highlights of various programs, the impact of the organization’s work, financial statements, and narratives that provide context for the numbers. This transparency is crucial for stakeholders, including donors, board members, and the general public, as it builds trust and accountability. It provides a comprehensive overview that allows recipients to understand how effectively the organization is utilizing its resources and fulfilling its objectives. By focusing on both quantitative data and qualitative insights, the annual report effectively illustrates the organization's overall performance over the past year.