A college nonprofit from the murky, still-developing world of Name, Image, Likeness programs will win tonight, regardless of the final score.
No matter who takes home the College Football Playoff championship Monday night in Houston, a rare nonprofit from the murky, still-developing world of Name, Image, Likeness programs is set to come out on top.
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The funding for NIL agreements generally comes from supporters of the college and often is described in philanthropic terms like “donations” and “fundraising campaigns.” However, the philanthropic trappings don’t make for-profit NIL collectives philanthropic, said Jonathan Jensen, associate professor of sport administration at University of North Carolina, Chapel Hill.
“Everybody — whether you’re talking about the donors, the university, that people who work at the collective — everybody understands that this is not a philanthropic thing,” Jensen said.
Since the IRS guidance was issued, the foundation that supports Texas A&M athletes said it was shutting down a fund it had launched earlier in 2023 to allow donors to support endorsement deals for Aggies athletes. The 12th Man Foundation will still engage in NIL activities, but using a different internal process.
New processes and new platforms will be the norm among NIL groups for a while, as they try to find a strategy that works. Montlake Futures, which supports athletes at the University of Washington, remains a nonprofit, but last month teamed with Blueprint Sports to offer a membership program that is not tax deductible.
Hail! Impact also lets supporters choose to have their donations go only to paying athletes, but those gifts are not tax deductible.
In any case, both Hail! Impact and Montlake Futures are set to come out ahead simply by supporting teams in the national championship.
Fundraising off a defeat may seem counterintuitive, Jensen said, but in fact, it draws on ideas in behavioral economics that prompt people to highly value things they already have, in this case, a football team’s winning reputation.
“If you play on that psychology, what they’re saying is …, ‘You could lose this mantle that you’re on as being a national championship caliber team,’” Jensen said. “So you need to reach in your pocket and spend money in order to keep this distinction.”
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