A Special Note Concerning

Advertising and Public Relations Costs

The Federal Office of Management and Budget (OMB) distinguishes between advertising and public relations in their Cost Principles for Non Profit Organizations, Circular A-122 (OMB, 1998a) and in their Cost Principles for Educational Institutions, Circular A-21 (OMB, 1998b) which detail allowable costs for programs funded under federal grants, contracts, or other agreements. Both Circulars indicate the following:

1. Advertising and public relations costs.

1. The term advertising costs means the costs of advertising media and corollary administrative costs. Advertising media include magazines, newspapers, radio and television programs, direct mail, exhibits, and the like.
2. The term public relations includes community relations and means those activities dedicated to maintaining the image of the organization or maintaining or promoting understanding and favorable relations with the community or public at large or any segment of the public.
3. The only allowable advertising costs are those which are solely for:
   1. The recruitment of personnel required for the performance by the organization of obligations arising under a sponsored award, when considered in conjunction with all other recruitment costs, as set forth in paragraph 44 ("Recruiting costs");
   2. The procurement of goods and services for the performance of a sponsored award; .....
   4. Other specific purposes necessary to meet the requirements of the sponsored award.
4. The only allowable public relations costs are:
   1. Costs specifically required by sponsored awards;
   2. Costs of communicating with the public and press pertaining to specific activities or accomplishments which result from performance of sponsored awards (these costs are considered necessary as part of the outreach effort for the sponsored awards); or
   3. Costs of conducting general liaison with news media and government public relations officers, to the extent that such activities are limited to communication and liaison necessary to keep the public informed on matters of public concern, such as notices of contract/grant awards, financial matters, etc. .....

Additionally, the following "Unallowable advertising and public relations costs" should be noted by all NIDRR-funded researchers:

1. All advertising and public relations costs other than as specified in subparagraphs c, d, and e;
4. Costs of advertising and public relations designed solely to promote the organization.
   (OMB, 1998a, Section 1; OMB 1998b, Section J)

These Cost Principles discourage the use of advertising, as defined in the Circulars, in the dissemination of NIDRR-funded research outcomes. However, public relations, as defined in the Circulars, may include the dissemination and marketing strategies described in this issue of The Research Exchange as "part of the outreach effort for the sponsored awards." This distinction requires that grantees ensure that the content of their dissemination/marketing activity pertains to their research and not their institution, center, or program. The

Cost Principles also imply that grantees should exercise caution in promoting their research results, particularly in advertising the sale of research information. This may be accomplished by openly sharing research outcomes as public relations information in a variety of media and by emphasizing the utilization of research outcomes by targeted users.

The Cost Principles apply only to the use of federal funds for advertising and public relations. Many organizations have separate funding that can be used for activities that are not allowed in the Cost Principles. The separate use and accounting of such funds provide more latitude in advertising and promoting programs and services, but must be kept apart from activities that use federal funds.

White House Office of Management and Budget (OMB). (1998a). OMB Circular A-122: Cost principles for non-profit organizations (Rev. 06/01/98). Washington, DC: Office of Management and Budget. Retrieved February 17, 2000 from the World Wide Web:
http://www.whitehouse.gov/omb/circulars/a122/a122.html

White House Office of Management and Budget (OMB). (1998b). OMB Circular A-21: Cost principles for educational institutions (Rev. 10/27/98). Washington, DC: Office of Management and Budget. Retrieved February 17, 2000 from the World Wide Web:
http://www.whitehouse.gov/omb/circulars/a021/a021.html

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