Donated Advertising

A reader emailed me a question about donated advertising. They wanted to know how to book the advertising, they are a small group and the value of the donated advertising was over three times their annual budget.

The way it is supposed to work is that if you are the recipient of any kind of donated advertising you must book it as a contribution and then as an offsetting expense as well.

But the value of the donated advertising must be equivalent to what someone would normally pay for that advertising. For example say your organization gets donated PSAs every night at 3:00 am for a week on a local radio station. The value of that donation should be based on the advertising rates at 3:00 am, not for prime time advertising rates which would be higher.