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
Whatever team wins Monday night’s College Football Playoff final in Houston, a unique nonprofit from the murky, emerging field of Name, Image, Likeness programs is sure to win
Since the National Collegiate Athletic Association was granted permission by the Supreme Court in 2021 to reimburse student athletes for the use of their trademarks, although with some limitations, a plethora of non-profit organizations (NILs) have emerged to assist college players in receiving compensation. Athletes that provide services for several for-profit companies, such as making in-person appearances, signing autographs, and sharing content on social media, are compensated with contributions.
But both Hail! Impact, an NIL organization for the University of Michigan‘s Wolverines, and Montlake Futures, which supports athletes at the University of Washington, have philanthropy at their cores. They are both registered 501(c)(3) nonprofits. That’s increasingly rare in the NIL world, especially after the Internal Revenue Service issued guidance in May that NIL collectives may not qualify as tax-exempt if their main purpose is paying players rather than supporting charitable works.
Co-founder Andy Johnson of Hail! Impact stated that since the IRS released its guidelines on donations, his organization—which was founded in April—believes it is the first NIL collective to be recognized as a charity. When Hail! Impact gets a donation, thirty percent of the funds are given to the Michigan student athletes who labor at the charity’s events, and seventy percent of the funds are donated to one of its partner organizations in the community.
Johnson stated that Champions Circle, a for-profit organization that assists Michigan student athletes, can assist them in signing players. “In every team, especially a football or basketball team, there are going to be a handful of players that the market allows to go out and maximize their NIL opportunities on a commercial basis,” Johnson said.
Salute! Impact gives contributors the opportunity to support all varsity sports at Michigan, including both men’s and women’s, and for contributions substantial enough, they may even select the local charity. Johnson stated, “It’s given non-revenue sports where someone might have a real attachment meaningful opportunities.” Someone may declare, ‘I would want to assist the softball team.'” I want to give these ladies, who are excellent athletes and scholars, the opportunity to earn some money and do a day of community service.
But Michigan’s victory on New Year’s Day in the Rose Bowl elevated Hail! Impact’s chances to a whole new level. Hail! Impact received millions of dollars in donations from overjoyed Michigan supporters in the days following the victory, with one contributor contributing $2 million, according to Johnson.
A national title may advance it even farther.
Johnson remarked, “It’s amazing how one game could change our mission the way it has.”
It also didn’t hurt that the University of Alabama’s squad was sponsored by NIL. Shortly after Alabama’s defeat over Michigan, the non-profit organization Yea Alabama made a unique plea.
Director of content for Yea Alabama Aaron Suttles stated, “We need to have the biggest, best NIL program that we possibly can have to keep Alabama in the best position.” “Therefore, think about making a donation or joining Yea Alabama.”
NIL agreements are often financed by college supporters, and the money is sometimes referred to in charitable terms like “donations” and “fundraising campaigns.” For-profit NIL collectives are not charitable, despite their charitable appearance, according to Jonathan Jenson, an associate professor of sport management at the University of North Carolina in Chapel Hill.
“It is widely understood by all parties involved—donors, the university, and employees of the collective—that this is not a charitable endeavor,” Jenson stated.
The organization that helps Texas A&M athletics said that it was closing a fund it had started earlier in 2023 to enable contributors to support endorsement deals for Aggies athletes in light of the IRS instructions. The 12th Man Foundation will continue to use NIL, but through an alternative internal procedure.
For a long, NIL organizations will be using new platforms and procedures while they search for an effective approach. Although Montlake Futures, which assists University of Washington athletes, is still a nonprofit organization, it collaborated with Blueprint Sports last month to provide
Salute! Supporters can also designate through Impact that their donations exclusively go toward compensating athletes; however, these contributions are not tax deductible.
Anyway, by just backing teams in the national tournament, Hail! Impact and Montlake Futures are sure to win.
While Jenson acknowledged that fundraising after a loss can appear strange, it really makes use of behavioral economics theories that encourage individuals to place a high value on possessions they already have—in this example, the winning reputation of a football team.
“They’re saying, ‘You could lose this mantle that you’re on as being a national championship caliber team,’ if you play on that psychology,” Jenson said. Therefore, in order to maintain, you must dip into your pocket and pay money.
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