Will NIL collectives become common in D2 and D3?

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Discussion on Name, Image, and Likeness collectives has dominated sports headlines since California became the first state to pass a law allowing athletes to profit off their NIL on Sept. 30, 2019. By the end of October 2019, 20 more states were considering NIL laws similar to California. 

A NIL collective is typically founded by alums and supporters of a university and operates independently of the school while funding NIL opportunities for the athletes. Currently, there are at least 205 NIL collectives, according to On3.com

While much of the discussion around NIL has focused on DI institutions, there aren’t many collectives for the Non-D1 athletes. However, division II Winona State announced an “All-University” collective partnership with MOGL in February. So the question becomes how long until NIL collectives become commonplace in DII and DIII. 

Every coach presented with this question believes that collectives will become prevalent in DII and DIII within a few years. Many coaches said some Texas DII and DIII schools are working to begin a collective.

“I know of one Division III school in Texas actively working on a NIL collective right now,” one coach said. “I’m trying to get something going here as well. I think everyone will have a collective within the next 10 years.”

“There will be a trickle-down effect. It started at Division I, and it’s going to work its way down to us sooner rather than later,” another coach said. “It’s definitely going to be a priority for everyone moving forward, so we have to start thinking of ways to get it done here that will make sense for our university.”

Many DIII universities are figuring out how a collective can operate within Division III, considering it’s the only NCAA division that doesn’t offer athletic scholarships. However, some coaches said that challenges remain for collectives to avoid incurring NCAA sanctions in DIII. 

“The challenge is figuring out a way to do a collective to where the NCAA won’t consider it a benefit,” one coach said. “The first school that’s able to figure that out will have a big advantage over the rest of us. The rules are different for Division III schools, so it won’t work the same way for them as it does for FCS schools.”

“We’re still in the process of trying to see if we can come up with a plan that will work. We have people on the outside that would love to be a part of a collective. We just have to figure out how to do it and not get in trouble with the compliance office.”

According to sources, most NIL discussions at the Non-D1 schools in Texas revolve around developing a model similar to the Kat Fund at Sam Houston State. The Kat Fund, and other similar collectives across Texas FCS institutions, operate as a 501c3 nonprofit organization.

“I prefer to use collectives for the athletes that have established themselves at our school instead of giving it to someone that hasn’t stepped on our campus yet,” one coach said. “We don’t get the turnover that you have with some FCS rosters, so the 501c3 method is a good model to use.”

However, earning 501c3 status as a nonprofit organization from the Internal Revenue Service is a long and arduous process that can take years to achieve. The delay has left many schools trying to start a partnership similar to Winona State, where the athletes use a marketplace like MOGL or Opendorse

The discussion on NIL collectives has moved beyond whether coaches agree or disagree with the concept. Instead, the issue for coaches now is ensuring their athletes have the same opportunities in DII and DIII as those in Division I.

“We have to find something for our athletes here at our level,” one coach said. “Why should our athletes be discriminated against compared to athletes at Division I?”

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