IRS: Some nonprofit NIL groups may not qualify
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 Cohesion 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.”
The collectives were born out of the massive change that hit college sports in 2021 when athletes were allowed to earn money in ways that had been prohibited for decades.
Some collectives — and there are dozens of them — are set up as for-profit entities that help connect athletes with endorsement deals as the new market swelled into the millions and NIL became a recruiting tool. Opendorse, a company that partners with schools to help initiate, track and monitor NIL deals, projected nearly $1.2 billion flowing through the industry in 2023.
The nonprofit model was an attractive option for some donors and entrepreneurs, who tout such things as appearances at sports camps and fundraisers and social media promotions for select charities. There are an estimated 80 such collectives.
Charities gained exposure from star athletes who earned money. And donors got the promise of a tax-deductible donation.
According to the IRS, those collectives already granted tax-exempt status don’t lose it as a result of the June 9 memo. But it does lay out new guidelines for how they are expected to operate if they want to keep it.
“These collectives may face future examinations or enforcement action by the IRS,” the agency said without elaboration.
“The big question is whether this memo will spook donors enough that they will no longer want to donate to nonprofit collectives, and schools enough that they tell donors not to donate to them,” said Mit Winter, a sports law attorney in Kansas City, Missouri, who tracks issues in the college athlete marketplace.
Congress has also been watching. A bipartisan bill filed in 2022 would limit tax deductions for bankrolling nonprofit NIL collectives, but it has yet to pass.
The IRS was granting tax-exempt status to collectives for more than a year before issuing the memo that determined, in many cases, paying players isn’t merely incidental to the charitable cause but “is the very justification for the organization’s existence.”
“The only question was to what extent would the IRS would put its thumb on the scales. It was pretty clear many of these organizations were pushing the boundaries,” said Brian Mittendorf, an accounting professor at Ohio State with a concentration on nonprofits.
“The IRS memo put a line in the sand,” Mittendorf said. “Paying college athletes is not a charitable purpose. Paying an athlete and doing some charitable work on the side, is also not a charitable purpose.”
The IRS warning should not have come as a surprise, said Jason Belzer, founder of Student Athlete NIL, which operates several commercial collectives for schools across the country.
“All of these nonprofits were paid solely for paying student athletes, not for doing the charitable work,” Belzer said. “That’s racketeering.”
The NCAA has raised concerns about the collectives, but the federal government is a different story when it comes to enforcing rules that have been somewhat murky when it comes to athlete compensation.
“The IRS,” Belzer said, “is not the NCAA.”
Eventually, annual financial disclosures required by state and federal regulators will show how much money is collected, spent and to whom. Because these organizations are so new, many of those records haven’t been filed yet.
Marcinick said Cohesion has partnered nearly 80 Buckeyes athletes from multiple sports for NIL deals totaling more than $1.5 million. Partner charities include the Ronald McDonald House, Special Olympics, an area food bank and drug and emotional abuse support groups.
“Unfortunately, there are bad actors out there. They have used [nonprofit status] as a way to harvest donations that have nothing to do with a charitable purpose,” Marcinick said. “We’re a good actor. … We’re paying the price for others.”
On June 9, Ohio State‘s all-Big Ten defensive end J.T. Tuimoloau hosted a football camp for about 80 children backed by the Boys & Girls Club of Central Ohio and the Lindy Infante Foundation, which helps local nonprofits create and improve youth sports programs.
“He talked to the kids, went to every station, signed autographs,” said foundation President Stephanie Infante, calling the IRS memo potentially “devastating” if it effectively ends partnerships like that one.
“It was such a great day and great event,” Infante said. “Nonprofits struggle as it is. To be able to interact and get involved with athletes who are reaching out … It’s been such a great opportunity for athletes to get involved in their community.”
Not everyone is ready to back out of the marketplace.
The Texas One Fund, a multi-pronged collective that includes the Horns With Heart program and its promise of $50,000 for scholarship offensive linemen, intends to keep doing business as usual. The Texas One Fund has long had a disclaimer that a donation could be tax deductible but advice should be sought from a tax attorney.
Texas One Fund will show any nervous donors the group’s March 2022 IRS letter granting nonprofit status, said Patrick Smith, the collective’s president.
“All we can do is continue to perform the mission of our [nonprofit],” he said. “If that whole thing is disallowed. It would be sad for the charities we are helping out.”
Texas One Fund also has a new connection with the university that should help keep the money flowing in. Starting July 1, donors can earn loyalty points with the school-affiliated Longhorn Foundation for season-ticket selections and upgrades.
“I don’t know what effect the memo will have on NIL giving,” Smith said. “Whether it’s a [nonprofit] or not, money is still going to flow to college athletes.”
Jacob Misiorowski and Paul Skenes needed fewer than 80 pitches each to set new standards for velocity in the first matchup between these 23-year-old flamethrowers.
Misiorowski struck out eight and allowed two hits and two walks in five shutout innings as his Brewers defeated Skenes’ Pittsburgh Pirates 4-2 in Milwaukee on Wednesday.
Skenes lasted just four innings — matching the second-shortest outing of his career — while striking out four and allowing four runs, four hits and two walks. All four runs came in the second inning, as the Brewers went through all nine batters in a 37-pitch inning. Never before had Skenes faced that many hitters, thrown that many pitches or yielded that many runs in a single inning.
Misiorowski said he made an extra effort to avoid getting caught up in all the hype surrounding the rookie’s highly anticipated matchup with Skenes.
“It was just one of those things that you wanted to try and calm yourself down as much as possible and stay off the internet, because I feel like everything I swiped was me and Skenes, me and Skenes, me and Skenes,” Misiorowski said. “I had to mute it, turn it off.”
In the second inning, after the Brewers’ Isaac Collins drew a leadoff walk, Brice Turang and Caleb Durbin each followed with a single to center field to load the bases with nobody out. Collins scored on Joey Ortiz‘s groundout along the first-base line, and Eric Haase doubled to bring in Turang. Sal Frelick connected on a splitter that went to Pirates second baseman Nick Gonzales, but an overthrow to catcher Henry Davis at the plate allowed Durbin to come around and score. Christian Yelich increased the lead to four runs with a single to left field that brought in Haase.
It was only the third time in 40 career starts that Skenes had given up as many as four runs, and it snapped a stretch of nine straight starts in which he had allowed two runs or fewer. Skenes also had not allowed a run in the first two innings of a game since Aug. 28, 2024.
According to Sportradar, Misiorowski averaged 99.5 mph and Skenes averaged 98.5 on their fastballs. That represented the highest combined fastball velocity by two starting pitchers in the same game since at least 2009.
Misiorowski reached at least 100 mph on 19 of his 74 pitches while establishing a career high of 102.4 mph, the fastest strikeout pitch for a Brewer in the pitch tracking era (since 2008), according to ESPN Research. And Skenes got to 100 mph once out of 78 pitches. Since at least 2009, this marked the most combined 100 mph pitches by opposing starters for any game in which both reached that threshold at least once.
“I’ve watched plenty of his games,” Misiorowski said of Skenes. “It’s awesome to face a guy like that and really compare yourself to some of the best.”
There have been 19 occasions since 2000 in which a single pitcher has thrown at least 20 pitches of at least 100 mph, but in none of those instances did the opposing starter also reach 100 mph.
Through his first three career starts, Misiorowski owns a 3-0 record and a 1.13 ERA. He has struck out 19 while allowing only three hits and seven walks over 16 innings. He is the first pitcher since 1900 with as many or more wins as hits allowed over his first three major league appearances (minimum 15 innings pitched), according to ESPN Research.
What advice would Skenes give Misiorowski about how to handle the scrutiny that could accompany an emergence to stardom?
“You’ve got to protect yourself, for lack of a better term, obviously, with the media, but I assume if he goes and walks around Milwaukee now, there’s going to be more people that recognize him and all that,” said Skenes, who met Misiorowski for the first time Monday. “If he does what he’s supposed to do and everybody thinks he can do, that’s not going away any time soon. Get used to it and find ways to find peace and that kind of thing.”
Wednesday’s performance increased Skenes’ career ERA from 1.91 to 2.03 and dropped his record this season to 4-7.
“They did a good job of getting to some pitches,” Skenes said. “I wasn’t unhappy with the execution of all of those; there are probably a couple that could have been better. But they did a good job.”
Reliever Trevor Megill threw a perfect ninth for his 18th save of the season, as Milwaukee won its sixth game in the past seven.
The Associated Press and Reuters contributed to this report.
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Jesse Rogers
CHICAGO — A 22-year-old fan has been banned indefinitely from all MLB ballparks after yelling something about Arizona Diamondbacks second baseman Ketel Marte‘s late mother during Tuesday night’s game against the Chicago White Sox, according to a source.
Marte, 31, was brought to tears by the incident, which occurred while he was at bat in the seventh inning. Marte’s mother, Elpidia Valdez, died in a car accident in the Dominican Republic in 2017.
Team personnel, including Diamondbacks manager Torey Lovullo, heard the comment and asked for the fan to be ejected. According to a source familiar with the situation, the fan was remorseful for his actions, admitting to his inappropriate comments.
“We commend the White Sox for taking immediate action in removing the fan,” said MLB in a statement.
Marte declined comment after the game Tuesday. It’s not publicly known what the fan said to upset the 11-year veteran.
Marte received a round of applause during his first at bat of Wednesday’s game.
We’re with you, @ketel_marte4 🫶 pic.twitter.com/1F7j5fFz8K
— Chicago White Sox (@whitesox) June 25, 2025
It’s not the first incident this season of a fan yelling something inappropriate at a player on the field.
In April, a fan in Cleveland yelled at Boston Red Sox outfielder Jarren Duran after the player shared in a documentary that he had attempted suicide three years ago. The fan was ejected and banned from the ballpark after that incident as well.
The White Sox avoided being swept in the series finale Wednesday with a 7-3 victory. Marte went hitless in four at-bats with two strikeouts.
Braves slugger Ronald Acuna Jr. said Wednesday he’ll be competing in the Home Run Derby at Truist Park in Atlanta.
Acuna made the announcement on “SportsCenter” ahead of the Braves’ game against the Mets in New York.
“I’m just happy to announce that I’ll be participating in this year’s Home Run Derby, and I’m even more excited to be doing it at home in Atlanta in front of our fans,” Acuna said through an interpreter. “They’re a big reason I’m doing this. I’m Ronald Acuna Jr. because of their support. I’m just excited to go back and home and do this for them.”
Acuna, a four-time All-Star, will be competing in the derby for the third time in his career. He lost to the Pete Alonso 20-19 in the semifinals in 2019, then lost to the Mets slugger again 20-19 in the first round at Dodger Stadium in 2022.
No Braves player ever has won the competition.
“I feel like the expectation and the goal is always to win, no matter what,” he said. “But more than anything, I’m just excited to do it in front of our fans and put on a good show for them.”
Acuna rejoined the Braves in late May, almost one year after he tore his left ACL, and proceeded to hit a 467-foot on the first pitch of his first at-bat. He hasn’t slowed down, carrying a .385 average, nine homers and 16 RBIs into Wednesday night’s game vs. the Mets.
This year’s Home Run Derby will take place July 14, with the All-Star Game the following day.
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