NIL collectives ran into a potential buzzsaw on Friday as the Internal Revenue Service posted a memo stating that these organizations cannot claim to be tax exempt.
That means donors likely are unable to deduct donations to collegiate collectives from their income. This update could dramatically slow investment into these collectives, which have driven countless player acquisitions since NIL was instituted in 2021.
Many collectives had advertised donations as 100% tax deductible. Others have been more measured in their language.