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Can universities raise money to pay athletes through philanthropy since House v. NCAA decision?

  • 1.  Can universities raise money to pay athletes through philanthropy since House v. NCAA decision?

    Posted 08-01-2025 09:31 AM

    Hi! 

    UNH has opted in to the House v. NCAA settlement and our Athletics department wants us to set up gift funds for separate sports that have been chosen to fall under the $20.5 million cap. We just want to confirm that we may raise money through philanthropy for the purposes of paying the student-athletes. 

    Thank you, in advance, for your assistance.



    ------------------------------
    Laura Martin
    University of New Hampshire
    laura.martin@unh.edu
    ------------------------------


  • 2.  RE: Can universities raise money to pay athletes through philanthropy since House v. NCAA decision?

    Posted 08-01-2025 11:28 AM
    If you are talking about the NIL settlement, you can raise NIL funds without going through a collective. But the funds raised are not considered tax-dedictible charitable donations as those dollars flow through to athletes as taxable income.

    You can participate in raising those funds, but they are not countable for CASE or deductible to the donors.

    John

    John Taylor Principal, John H. Taylor Consulting, LLC 919.816.5903 Big ideas; small keyboard





  • 3.  RE: Can universities raise money to pay athletes through philanthropy since House v. NCAA decision?

    Posted 08-01-2025 03:36 PM

    Thank you, John. This is very helpful.

     

    Laura

     




    Original Message


  • 4.  RE: Can universities raise money to pay athletes through philanthropy since House v. NCAA decision?

    Posted 08-02-2025 08:51 AM

    John -

    Are donors able to use DAFs to contribute to an NIL initiative?

    Thanks!



    ------------------------------
    Amanda Wilton Davis
    St. Bonaventure University
    adavis@sbu.edu
    ------------------------------

    Original Message


  • 5.  RE: Can universities raise money to pay athletes through philanthropy since House v. NCAA decision?

    Posted 08-02-2025 09:04 AM
    Heavens, no. A DAF gift must be 100% tax-deductible.

    John

    John Taylor Principal, John H. Taylor Consulting, LLC 919.816.5903 Big ideas; small keyboard





    Original Message


  • 6.  RE: Can universities raise money to pay athletes through philanthropy since House v. NCAA decision?

    Posted 08-04-2025 10:37 AM

    John - Are you able to clarify your last response? Gifts to the University of Texas One Fund (per their FAQs) are tax deductible. Is the distinction here that payments to NIL Collectives are not tax deductible (clearly stated by the IRS), but gifts to other NIL initiatives with exempt status (such as the Texas One Fund) are?



    ------------------------------
    Erin Osenbaugh
    The Dallas Foundation
    eosenbaugh@dallasfoundation.org
    ------------------------------

    Original Message


  • 7.  RE: Can universities raise money to pay athletes through philanthropy since House v. NCAA decision?

    Posted 08-04-2025 10:50 AM
    I am not aware of any NIL payments being tax deductible.

    John Taylor Principal, John H. Taylor Consulting, LLC 919.816.5903 Big ideas; small keyboard





    Original Message


  • 8.  RE: Can universities raise money to pay athletes through philanthropy since House v. NCAA decision?

    Posted 08-04-2025 10:54 AM
    Here is a useful resource:



    John Taylor Principal, John H. Taylor Consulting, LLC 919.816.5903 Big ideas; small keyboard





    Original Message


  • 9.  RE: Can universities raise money to pay athletes through philanthropy since House v. NCAA decision?

    Posted 08-04-2025 11:06 AM
    Some NIL collectives are nonprofit 501c3s whose work is limited to promoting and helping other nonprofits. Donors can make tax-deductible contributions to these kinds of NIL collectives. The IRS has clarified that if the main purpose of the collective is to pay student-athletes, such an entity shouldn't be tax-exempt, but it didn't revoke any c3s when it issued the clarifying memo. see https://www.alston.com/en/insights/publications/2023/10/the-irss-latest-play-on-nil-collectives Nevertheless, most NIL collectives probably fall into the non-tax-exempt category. 

    @Erin - the Texas One faq doesn't appear to be accessible from their public website anymore, just from the direct link you posted, and the website is silent on tax donation and their own 501c3 status. The donation is now framed as membership, too. You may have uncovered a zombie page that does not reflect their current policy.


    Thank you,
    Isaac Shalev
    Data Strategy Expert
    Sage70, Inc.
    (917) 859-0151
    isaac@sage70.com

    Schedule a 30-minute consultation now:





    Original Message


  • 10.  RE: Can universities raise money to pay athletes through philanthropy since House v. NCAA decision?

    Posted 08-04-2025 12:54 PM
    Excellent additional information, Isaac. I can also add that there are some opportunities for corporations to claim a deduction for certain BUSINESS EXPENSES.

    But when the payment is made to directly benefit student athletes, their is no CHARITABLE deduction nor can the payment count (per CASE) in VSE fundraising totals.

    Now, back to my regularly scheduled vacation!

    John

    John Taylor Principal, John H. Taylor Consulting, LLC 919.816.5903 Big ideas; small keyboard





    Original Message


  • 11.  RE: Can universities raise money to pay athletes through philanthropy since House v. NCAA decision?

    Posted 08-04-2025 04:02 PM

    Let me start by saying: John, please ignore this, as you are on vacation!

    I really appreciate all that has been added to this conversation. From John's response--and the input of others, like Isaac--we understand that the "gifts" that our Athletics' colleagues were intending to solicit for revenue-sharing would not be tax deductible, but then we run across programs like SMU's Benefit Fund--"the SMU revenue-sharing program"--which claims to be 100% tax deductible, and it makes it difficult to convince our Athletics Director that we're being IRS compliant by not running and advertising such a program. SMU goes as far as to state, "Now that the House v. NCAA settlement is in effect, gifts that were formerly made to the Boulevard Collective can be made directly to the Student-Athlete Benefit Fund." https://www.smu.edu/giving/student-athlete-benefit-fund

    I realize, of course, that others doing it does not make it right; it just makes it difficult to persuade our colleagues that it isn't possible. We get the, "but what about SMU?" type of questions and comments.

    Of course, if I'm missing a fine point of distinction that makes their program tax deductible, please let me know. I would love to understand it, especially if I'm incorrect. 

    Thank you, all!



    ------------------------------
    Laura Martin
    University of New Hampshire
    laura.martin@unh.edu
    ------------------------------

    Original Message


  • 12.  RE: Can universities raise money to pay athletes through philanthropy since House v. NCAA decision?

    Posted 08-04-2025 06:01 PM
    I cannot ignore things like this :-).

    I will point out that what SMU states they are offering is not the same as NIL. They are calling this "revenue sharing."

    However, some of their claims appear contrary to IRS regulations - especially the statement regarding payments resulting in "priority access to athletic events and exclusive experiences." The IRS ruled several years ago that 100% of any payment that qualifies a donor to priority access to athletic events renders the entire payment as non-deductible.

    Regardless, as I advise all clients, you should never operate under the platform of "If so-and-so is doing something we can, too." These matters must be determined by Counsel using IRS rules and regulations as guides. And feel free to share the evidence Isaac and I have provided.

    I have encountered quite a few institutions that made deductibility claims without checking with either Counsel or a complete reading of the IRS rules. Both steps are critical. When pursued after pointing to IRS rules, these institutions have dropped their deductibility claims (or changed their programs).

    SMU may very well be operating a program that has received legal and IRS blessings. However, I stand by the original statement that payments made for NIL purposes are not tax-deductible.

    John

    John H. Taylor, Principal
    John H. Taylor Consulting, LLC
    2604 Sevier Street
    Durham, NC     27705

    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987





    Original Message


  • 13.  RE: Can universities raise money to pay athletes through philanthropy since House v. NCAA decision?

    Posted 08-08-2025 10:40 AM

    Thank you, John, for weighing in on this while on vacation. It is very helpful in framing our response to our Athletics colleagues and will assist in getting the issue elevated to the right decision makers.

     

    Best,

    Laura

     




    Original Message


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