The landscape of college sports changed dramatically following a 2021 Supreme Court ruling that allowed student athletes to receive compensation for endorsements, leading to the formation of numerous nonprofit organizations aimed at managing these funds. Originally, there was hope that these collectives would significantly benefit charitable causes, but the reality has been quite different.
For a brief period, organizations like the Youth Leadership Foundation gained from this new system. University of Maryland athletes involved in name, image, and likeness (NIL) deals participated in mentorship programs with high school students. “Being able to expose students to role models that care about character and care about conducting themselves well as athletes, that’s been a huge plus,” noted Janaiha Bennett, the foundation’s executive director.
The Blueprint Sports Foundation initially played a pivotal role in organizing these activities, managing payments to NIL collectives nationwide. However, the lion’s share of the financial windfall from NIL payments has gone directly to athletes, with their earnings reaching nearly $2 billion annually.
The Evolution of NIL Collectives
The Supreme Court’s decision in NCAA v. Alston opened the floodgates for companies and nonprofits to pay athletes for promotional activities. Alumni and businesses quickly established NIL collectives, often registering them as nonprofits to benefit from tax deductions. However, in 2023, the IRS determined that these collectives did not meet the requirements for tax-exemption, as their primary aim — compensating students — did not serve the public interest.
The collectives faced further challenges following a 2025 class action settlement in House v. NCAA, which allowed universities to allocate $20.5 million annually towards student compensation, indexed for inflation. This led to the closure of several NIL collectives, as direct payments to students by universities became feasible. “NIL collectives have basically been in shutdown mode because now you can just give the money to the school,” explained Jason Kohout, a lawyer with experience in representing NIL collectives.
Challenges and Opportunities in Philanthropy
With the IRS’s scrutiny, organizations like the Blueprint Sports Foundation disbanded, transitioning some operations to for-profit entities like Blueprint Sports. While University of Maryland athletes are no longer compensated for their involvement in the Youth Leadership Foundation program, the program continues robustly, according to Bennett.
Roy Kessel, founder of the Sports Philanthropy Network, cautions that the connection between athletes and philanthropy is at risk. He emphasizes the importance of educating student athletes about philanthropy to ensure they continue giving back. Kessel’s campaign, NIL4Good, aims to encourage athletes to donate a portion of their NIL earnings to charity, although funding challenges persist. “What student athletes need is sound advice on the practice of giving and the freedom to choose how to make an impact that comes from the heart,” Kessel stated.
Ultimately, the integration of philanthropy within the NIL framework remains an evolving challenge, with significant opportunities for educating athletes on financial management and charitable giving. For further insights into the dynamics of college sports funding and philanthropy, visit the Associated Press philanthropy hub.
