The public relations industry has a received a collective pat on the back from the top names in corporate America. The evidence comes a study by the USC Annenberg Strategic Public Relations Center, Los Angeles, that found more than three-quarters of Fortune 500 companies now have PR reporting directly to the C-level executive suite.

In particular, the study found that PR executives who report to the C-level suite – specifically, CEOs, COOs or Chairman – are not only more satisfied with their reporting line, they also receive more support and consideration within the organization. Furthermore, when reporting to this level, PR was more likely to be included in senior level meetings and strategic planning. This is consistent with the study’s finding that CEOs believe in PR’s contributions in terms of corporate reputation, market share, financial success and sales.

The report makes it clear that PR is seen as a contributor to the bottom line, especially if it reports to the C-Suite. About 64% of all respondents, and 77% of Fortune 500 respondents, reported to the C-Suite. They were much more likely to indicate that their CEOs believe PR contributes to market share, financial success, and sales, than those reporting to other parts of the organization.

This hard-won respect has also translated into a rise in PR budgets overall, according to the study’s authors.

In 2005 PR budgets increased by four percent, on average, across public companies, private companies, not-for-profits and government agencies. Based on the ratio of PR budgets to gross revenue, Fortune 500 companies averaged $646 spent on PR for every $1 million in gross revenue, and Fortune 1001-2000 companies averaged $962 spent on PR for every $1 million in gross revenue.

While more study is needed, year over year consistency in PR/GR Ratio data increasingly suggests that it can serve as a valid model for determining PR budgets.