The rapidly expanding landscape of nonprofit, donor-backed collectives paying college athletes to promote charities has been hit with a potentially seismic disruption.
A recent 12-page memo from the Internal Revenue Service determined that, in many cases, such collectives may not qualify as tax-exempt if their main purpose is paying players instead of supporting charitable works.
If the collectives aren’t tax-exempt, the donations they collect that are used to pay quarterbacks, point guards and pitchers may not be, either.
“There’s a high likelihood we will cease operations, within the next period of months,” said Gary Marcinick, founder of the Cohension Foundation, a collective formed to connect Ohio State athletes with charities for name, image and likeness (NIL) promotional deals. “In our space, we are donor driven .... It's not only a game changer, it’s a game ender, I think, in the vast majority of cases.”
Time will tell.
A recent 12-page memo from the Internal Revenue Service determined that, in many cases, such collectives may not qualify as tax-exempt if their main purpose is paying players instead of supporting charitable works.
If the collectives aren’t tax-exempt, the donations they collect that are used to pay quarterbacks, point guards and pitchers may not be, either.
“There’s a high likelihood we will cease operations, within the next period of months,” said Gary Marcinick, founder of the Cohension Foundation, a collective formed to connect Ohio State athletes with charities for name, image and likeness (NIL) promotional deals. “In our space, we are donor driven .... It's not only a game changer, it’s a game ender, I think, in the vast majority of cases.”
Time will tell.
