Earlier this year, our company President, Steven Edelman, published a white paper on how nonprofit organizations can properly value and report the financial benefit they receive from the free broadcast of their public service announcements (PSAs).

Here are three key takeaways from the article:

  1. Free broadcast air time provided by television and radio stations to nonprofits for their PSAs is considered a “gift in kind” for nonprofit accounting purposes.
  1. Gift in kind donations must be recognized at their fair market value.  Fair market value can be determined by what media buyers actually paid to run paid ads at a particular time of day and in a particular part of the country.  This information is available, but procuring it and sorting through it can be a daunting task.
  1. Every gift in kind donation received by a nonprofit organization must be reported on the organization’s financial statements.  This means, that even if a PSA receives only a single television or radio broadcast, the value of that air time must be reported.

Nonprofit organizations may seek the assistance of valuation specialists, such as Connect360, to obtain and sort through the data necessary to properly calculate the fair market value of all broadcasts received by an organization throughout its PSA campaigns.

 

“Connect360 Multimedia is a company that specializes in the measurement and valuation of PSA campaigns for organizations with budgets of all sizes.  It is also a leading producer and distributor of PSA campaigns (including broadcast, out-of-home, print, and internet-based media).  It has a deep expertise in PSA campaigns, is headed by a CPA, and maintains state-of-the-art systems designed to value and report on PSA campaigns in strict compliance with Generally Accepted Accounting Principles.”  — Steven Edelman, President, Connect360 Multimedia.

 

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Using Public Service Announcements to Improve Nonprofit Communications and Financial Performance