While many nonprofits use Public Service Announcements (PSAs) for generating awareness for their organization or cause, they may not realize that the earned media values that result from a PSA campaign can be used as a Gift-In-Kind donation on their financial statements. However, there are specific guidelines that nonprofits need to follow in order to take advantage of this important benefit. The use of PSA media values for Gift-In-Kind donations needs to be done in full compliance with Generally Accepted Accounting Principles (GAAP). This all starts with how PSA media valuations are calculated, which makes this a critical factor when selecting a PSA distribution partner.
Demand a reliable, sound methodology
Public service campaigns are an essential marketing tool for nonprofits, and also contribute to the financial well-being of an organization. This makes them too important to risk by using non-GAAP compliant valuations and methodologies.
Non-GAAP compliant valuations may consist of media values provided by trade associations, formulas or estimates based on ad rates in markets, or data provided by other non-industry sources, all of which are non-GAAP compliant. Accepting non-GAAP compliant valuations will cause serious problems when donated PSA media values are used as a Gift-In-Kind donation on a nonprofit’s financial statements, particularly when this information is reviewed as part of an audit. This can also negatively impact a nonprofit’s financial efficiency and affect the scores received from organizations that evaluate and rate nonprofits such as GuideStar or Charity Navigator. All of this may hinder donations and support for a cause.
Connect360 Multimedia is the only PSA distribution organization whose PSA media valuations are prepared under the direction of a CPA, ensuring that the results are in full compliance with GAAP requirements.