Texas A&M eventually led to the shutdown of the controversial 12+ Man after they had reviewed directives from the IRS. The fund, which attempted to bring name image and likeness, they have put the status of the 12th Man Foundation at risk.
On June 9, when the IRS released a memo, immediately after this, the decision to shut down the NIL fund came, and this made the NIL collectives tell that their function didn’t fit within the confines of the tax-attempt status.
This 12+ man fund definitely made an attempt to reward all the donors with all the athletic department points and even the tax benefits, which were in exchange for donations that is to provide the NIL compensation to all the athletes.
Following all the consultations with the external advisors, the approach towards NIL is altered by the 12th Man Foundation, and this even includes the discontinuation of the 12th Man+ fund.
This decision was made in order to ensure that the 12th Man Foundation definitely meets its high standards for compliance and even to protect the important mission of the organization. This was informed and said by the 12th Man Foundation.
Texas A&M has definitely planned to reach out to 12th Man+ Fund donors and even allow them to redirect all their donations to the approved fundraising organizations.
Even though the 12th Man Foundation is eliminating its collective-based NIL arm, the organization still says that it will remain connected and committed to all supporting NIL for players, and they will make it through marketing efforts rather than a huge direct payment.
Texas A&M and 12th Man NIL funds:
This 12th Man fund made its major ripples in the month of February and was considered the first in-house NIL fundraising effort. Immediately after this, the NCAA tried to fight back harder and issued a memo that essentially told Texas A&M that the fund explicitly is the one which violated all the NCAA rules and regulations.
Texas A&M dared the NCAA to act. On the other side, IRS has it’s another story. The Aggies could not ignore a potential threat that was given to the non-profit status of the so-called primary fundraising arm. The most significant drivers remain the tax benefits, and that is for the athletics department donations and even for the big money donors.
Just after the efforts made by A&M, multiple other schools started began exploring even the slightest possibility of creating similar programs. The shutting down of the 12th Man+ fund is indeed a warning sign to all other institutions that the tax implementation may not always be worth the trouble.
In March, after the NCAA issued its clarification, Texas A&M opted to ignore the same. In the month of May, Texas Governor Greg Abbott signed the legislation, which surely included all the input taxes from the A&M, which essentially banned the NCAA from even punishing or investigating schools for the collectives. Thus, this is what the recent updates of Texas A&M and the NCAA Act released.
