Here's an interesting article from ESPN about the Aggie collective. It's a small story but it could have wider ramifications. Apparently the IRS has deemed these collectives to be non tax exempt, which means you can't make a tax free donation. This could upend the whole NIL collectives industry. It's one thing to openly pay players, but no one wants to mess with the IRS.
Aggies Shutting Down Their Collective
The foundation that supports Texas A&M athletics announced Wednesday it is closing the branch set up for donors to support endorsement deals for Aggies athletes, an effort that has pushed the boundaries of how closely a school's traditional fundraising and booster groups could get involved in payments to players.
The 12th Man Foundation said it will still engage in name, image and likeness activities with Aggies athletes using "unrestricted donations." But it noted "external advisers" recommended shutting down the 12th Man+ Fund, which had just been launched in February.
The foundation cited a June memo from the Internal Revenue Service that said nonprofit "collectives" that were created primarily to pay players are likely not exempt from taxes, meaning donations would likely not be tax deductible.
Charity organization experts have noted the IRS memo could upend a rapidly growing market of collectives that have become a primary source of NIL deals for athletes. If donations to athletics-specific collectives are not tax deductible, experts have warned that money could dry up.
Aggies Shutting Down Their Collective
The foundation that supports Texas A&M athletics announced Wednesday it is closing the branch set up for donors to support endorsement deals for Aggies athletes, an effort that has pushed the boundaries of how closely a school's traditional fundraising and booster groups could get involved in payments to players.
The 12th Man Foundation said it will still engage in name, image and likeness activities with Aggies athletes using "unrestricted donations." But it noted "external advisers" recommended shutting down the 12th Man+ Fund, which had just been launched in February.
The foundation cited a June memo from the Internal Revenue Service that said nonprofit "collectives" that were created primarily to pay players are likely not exempt from taxes, meaning donations would likely not be tax deductible.
Charity organization experts have noted the IRS memo could upend a rapidly growing market of collectives that have become a primary source of NIL deals for athletes. If donations to athletics-specific collectives are not tax deductible, experts have warned that money could dry up.
