The 2021 Supreme Court decision in NCAA v. Alston unleashed a tidal wave of cash for college athletes through Name, Image, and Likeness (NIL) deals. Some nonprofit leaders hoped charities would benefit from these arrangements, but the reality has been mixed.
Although a few nonprofits saw gains, most of the financial benefits went directly to the athletes. This article examines the relationship between NIL payments, college sports, and charitable organizations, highlighting the opportunities and challenges that have emerged.
The Initial Optimism for Charitable Gains
After the Supreme Court decision allowed college athletes to earn from their name, image, and likeness, there was optimism that charities would also benefit. Nonprofit collectives were formed to channel some of the new wealth into charitable activities.
For example, the Youth Leadership Foundation in Maryland partnered with student athletes to mentor high school students. This initiative, managed by the Blueprint Sports Foundation, aimed to connect young students with positive role models.
Early Success Stories
Some nonprofits saw tangible benefits early on. The University of Maryland’s partnership with the Youth Leadership Foundation is one example.
About 250 students from low-income neighborhoods participated each year, gaining mentorship from college athletes. Janaiha Bennett, the nonprofit’s executive director, noted that this exposure to caring role models was a significant advantage.
The Financial Reality
Despite these successes, the broader financial picture was different. Five years after the Supreme Court decision, payments to athletes had reached nearly $2 billion annually.
The benefits to charities remained very small in comparison. Jason Kohout, a lawyer for several NIL collectives, described the initial charitable gains as a brief moment, not a lasting trend.
IRS Ruling and Its Impact
In 2023, the Internal Revenue Service (IRS) ruled that nonprofit NIL collectives did not qualify for tax-exemption. The IRS found that the main purpose of these collectives—compensating students—did not primarily serve the public.
This ruling led to the disbanding of several NIL collectives, including the Blueprint Sports Foundation.
Shifting Strategies: From Nonprofits to Direct Payments
After the IRS ruling and a 2025 settlement in the House v. NCAA case, universities gained the ability to pay athletes directly. This change made many NIL collectives unnecessary.
Universities could now give large sums directly to student compensation, reducing the need for third-party collectives.
Closure of NIL Collectives
Several prominent NIL collectives shut down after these changes. Student Athlete NIL, which included colleges like Georgia Tech and the University of Oklahoma, and the NIL fund linked to Texas A&M’s 12th Man Foundation, were among those that closed.
Roy Kessel, founder of the Sports Philanthropy Network, noted that with universities making direct payments, the role of NIL collectives became much smaller.
The Role of Philanthropy in the NIL Era
Some athletes created their own foundations, inspired by their involvement in charitable activities through collectives. However, overall charitable contributions linked to NIL payments have declined.
Challenges in Promoting Philanthropy
Roy Kessel launched the NIL4Good campaign to encourage student athletes to donate part of their NIL earnings to charity. Raising funds for this campaign was difficult.
Kessel said that the shift toward paying college athletes was so large that efforts to educate students about philanthropy struggled to keep up.
Looking Ahead: The Future of NIL and Charitable Giving
The NIL era has increased the pursuit of revenue in college sports. Athletic departments are finding new ways to generate income, such as adding corporate logos to uniforms and building entertainment districts.
This focus on revenue raises concerns about the future of charitable giving in college sports.
The Need for Financial Education
Experts like Kessel emphasize the need for good financial advice for student athletes. Without proper education on money management and philanthropy, the chance to build a culture of giving may be lost.
Universities have not yet made major investments in helping students make meaningful charitable contributions.
Conclusion
The relationship between NIL payments, college sports, and charitable organizations is complex and still changing.
Most of the financial benefits have gone directly to the athletes.
Nonprofits have seen only limited gains.
Universities face the challenge of balancing revenue with encouraging philanthropy among student athletes.
For a detailed exploration of the dynamics between NIL payments and charitable activities, you can read the full article on AP News.
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