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  • 1.  Using gifts for NIL Purposes

    Posted 10-13-2025 10:23 AM

    Hi All

    I'd like to know how other schools are handling this. We've been asked by Athletics if we can take gifts for Men's Basketball and Women's Basketball and then turn around and give the funds to a student for Name Image Likeness (NIL) purposes.

    Can we do this? Are we able to issue a charitable tax receipt to the donor and then turn around and use the funds for NIL?

    What are other schools doing?


    Thank you!

    Jessica



    ------------------------------
    Jessica Fitman
    Valparaiso University
    jessica.fitman@valpo.edu
    ------------------------------


  • 2.  RE: Using gifts for NIL Purposes

    Posted 10-13-2025 10:34 AM
    No, you cannot. These funds are income to the respective students receiving the NIL payments.

    For a deduction to be available, a donation to Valparaiso must serve the general public, rather than a private interest. Payments that directly benefit specific (or selective) individuals violate those rules.

    There's also the potential for acceptance of these payments to jeopardize your tax-exempt status:


    I think the counsel should be included in any further talks.

    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


  • 3.  RE: Using gifts for NIL Purposes

    Posted 10-15-2025 08:14 AM

    On a similar note, are there any schools fundraising for the Alston Awards for their student-athletes? We have a DI lacrosse program, and our athletics department is interested in collecting donations to award students cash at the end of the year. Are these considered donations, and can we legally provide tax receipts to them?

     

    Thank you,

    Wendy

     

    Wendy Barnhart

    Associate Director of Gift Accounting

    Office of Advancement

    300 Pulteney Street

    Geneva, NY 14456

    315.781.3725

    www.hws.edu/give

     

     

     

     




    Original Message


  • 4.  RE: Using gifts for NIL Purposes

    Posted 10-15-2025 10:23 AM
    Again, these are questions best suited for Counsel regardless of our opinions!

    Here is what I know about Alston Awards:
    • They cannot be used to make unrestricted "cash" payments to students. They must be used to cover education-related costs. You cannot simply say, "Here's some money - go have fun."
    • Most institutions treat these as academic awards and often provide them to all student-athletes. This helps address the IRS "charitable class" requirement. I've not heard of only one athletic program doing this.
    • The institution must have complete discretion over the allocation. Donors cannot specify students (see IRS Publication 526).
    • Assuming these awards are treated much like scholarships, with selection criteria that pass legal muster, are used for educational purposes, and the institution selects the recipients, donations can be deductible. If any of these tests fail, that payment is not tax-deductible and is treated as income to the student.
    Please speak with Counsel.

    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


  • 5.  RE: Using gifts for NIL Purposes

    Posted 10-15-2025 01:45 PM

    Thanks, John. I want to fully understand your last sentence:

    If any of these tests fail, that payment is not tax-deductible and is treated as income to the student.

    Are you saying that the donation is not tax-deductible to the donor, and we are unable to provide a tax receipt? I need to be very clear with our athletic department before they move forward with this initiative.

    Thanks!

    Wendy

     

    Wendy Barnhart

    Associate Director of Gift Accounting

    Office of Advancement

    300 Pulteney Street

    Geneva, NY 14456

    315.781.3725

    www.hws.edu/give

     

     

     

     




    Original Message


  • 6.  RE: Using gifts for NIL Purposes

    Posted 10-15-2025 02:21 PM
    If any of those tests fail, there is no tax-dedictible gift and no receipt and it is income to the student (which can impact their financial aid eligibility).

    Before you speak to Athletics you need to include Counsel and your CFO in the conversation.

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





    Original Message


  • 7.  RE: Using gifts for NIL Purposes

    Posted 10-15-2025 02:31 PM

    Thank you, John. I appreciate your timely response.

    I have looped our General Counsel in on this conversation.

     

     




    Original Message


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