Someone will have to educate me as to how giving NIL money to athletes promotes “charitable” work. Does that mean they do less charitable work without the NIL money? That then seems to mean they will do more charitable work if they are getting paid to do it which sort of makes it not charitable. Please help me understand what I am missing.
I'll take a stab, but anyone who is far more versed feel free to chime in. But there are high level 2 different types of NIL.
The first is like what Ketch did with OB athletes. It's a business owner directly paying an athlete due to their NIL to promote their business. This is not tax deductible/charitable, this is the business owner hoping to make a profit on that investment as that athlete markets their business. Sometimes they do, sometimes they don't,
Now one caveat is I understand that the compensation for that has to be "fair and reasonable". I've seen reports of athletes getting 300-500k/year and their "requirement" is to do a couple of one hour autograph sessions. Again, someone is paying them to do that and losing money on it, but you can see how this could be viewed as "pay to play" and not real NIL.
The other side is the tax-deductible Texas One fund. Texas One (and others) are approved as not for profit entities that you can donate to and take a tax deduction. To get, and keep, that status the funds have to pass several levels of scrutiny, but to keep it simple it has to be clear that this entity is not operating "for profit".
The way that Texas One does it, as far as I understand, is that they organize service opportunities for the athletes in the community. Again, probably a lot of variance there, but the cuddly idea is the star WR will go visit some kids at the hospital. There are some people who are working very hard and thanklessly to push not only the legality but the opportunity of this fund forward, and it is doing "good in the community".
The sideways part is again, what is "fair and reasonable"? Is the fund paying athletes $100k for a 1 hour appearance? If it is, is that acceptable? Why does one athlete and not another get that? To me, it's a tight rope to walk of being truly a non-profit in how we want it to work, while also being a real incentive for athletes who otherwise wouldn't care about the initiatives it serves.
If anyone wants to fill in the gaps or correct it, please do.