College athletes are now eligible for big time payments. Will nonprofits benefit?
When the 2021 Supreme Court decision allowed college athletes to receive compensation for their name, image, and likeness, some nonprofit leaders anticipated that charities could benefit from the influx of funds. Many organizations formed to raise money for these payments were actually nonprofits. However, the benefits have been minimal for charities.
Some institutions, like the University of Maryland, saw gains through partnerships with nonprofits, such as mentorship programs for high school students. The real financial benefits primarily went to the athletes themselves. In 2023, the IRS ruled that these collectives could not be tax-exempt, as their primary purpose was not to benefit the public.
As a result, many NIL collectives closed, and charities have struggled to find alternative sources of funding.
Written by urgent.news from Winnipeg Free Press's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
