The largest nonprofit collectives that facilitate name, image and likeness deals for Ohio State athletes raised a combined $4.03 million in their early months in operation in 2022, federal tax records show.
THE Foundation , which supports football and men's basketball players, reported $2.4 million in contributions, and Cohesion Foundation , another group backing a variety of the university's varsity sports, had $1.63 million in gross receipts on tax returns that were filed in November.
The returns, which were provided this week to The Dispatch, offer a rare peek at the finances of collectives, independent entities that are considered critical components of the NIL apparatus at Ohio State by relying on money from fans and boosters to help compensate athletes.
The collectives distribute funds to athletes in exchange for promoting charities around central Ohio through appearances at fundraising events and posts on social media.
Both collectives are organized as nonprofits due to the charitable work and received 501(c)(3) designations from the Internal Revenue Service two years ago, allowing donors to claim deductions for contributions on their taxes.
In compliance with their exempt statuses, the collectives are required to file 990 forms detailing revenues and expenses with the IRS.
The 1870 Society , the latest collective that launched last year, formed as a limited liability company, or LLC, leaving it without those reporting and disclosure requirements.
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While the tax documents provide a closer look at the money amassed by the nonprofit collectives, they are limited snapshots. The reporting period does not cover a full operating year.
Brian Schottenstein, a Columbus real estate executive, established THE Foundation with former Ohio State quarterback Cardale Jones in March 2022, while Gary Marcinick, a former wide receiver, set up Cohesion Foundation weeks later .
Tax returns for the 2023 calendar year are not due to be filed until later this year.
Schottenstein, though pleased with THE Foundation's early fundraising haul, emphasized the collective was in its infancy and spent just a handful of months actively raising money from donors that year. Its first fundraiser was not held until August .
"It was very nice," Schottenstein said. "It was a starting point. Two years later, we are doing way more."
The total from 2022 appears to be only a fraction of the amount in their pockets. Over the past 13-plus months, he said, THE Foundation has more than doubled that figure, including more than $4 million in donations last year.
He expects this year to set a record high for the collective, noting it has already reached the mark from two years ago in six weeks and is picking up pace.
The fundraising increase coincided with a matching campaign last month. Its board members matched $500,000 in donations.
But Schottenstein also considered the rise a reflection of a greater awareness.
"The main thing is people are becoming more comfortable with NIL," Schottenstein said, "and are seeing the good work that we are doing."
THE Foundation has been in operation for almost two years, a period of time that has seen it pair more than 70 football and men's basketball players with eight charitable organizations around Columbus.
Approximately 400 people were in attendance when defensive lineman Kayden McDonald and safeties Jayden Bonsu, Caleb Downs and Malik Hartford met with kids at an event at LifeTown Columbus in New Albany two weeks ago.
The NCAA first permitted athletes to profit off the use of their NIL in 2021 in response to state laws that had passed across the country.
Dan Apple, the executive director of Cohesion Foundation, said the $1.6 million raised by his group was also a "very positive" start.
"It was critical," he said, "to be able to deploy as much of that as possible to Ohio State student-athletes."
Cohesion Foundation has since scaled back on fundraising. Apple estimated it raised just half a million dollars last year, a significant drop from 2022.
The collective curtailed its efforts in the aftermath of an IRS memorandum released in June that cast doubt on the tax-exempt status of nonprofit NIL collectives .
While the tax agency's memo was not a ruling, nor a revocation of any group's exemption, it signaled a possible change in the landscape down the road and led some collectives such as Cohesion to reevaluate their operations.
"Everybody interprets those things differently," Apple said, "and our board just decided that we don't want to be out there trying to raise money and saying it's always going to be tax deductible."
Apple said the collective will run a 50/50 raffle at the Buckeyes' spring football game in April with proceeds benefiting players before it becomes inactive in the following months.
That will leave THE Foundation and The 1870 Society as the remaining active collectives supporting Ohio State.
THE Foundation has continued offering tax deductions to prospective donors without a change to its exempt status, as Schottenstein first said in the aftermath of the memo's release last summer.
"We're doing everything the right way," Schottenstein said. "We're just going to continue to run business as usual."
Joey Kaufman covers Ohio State football for The Columbus Dispatch and can be reached at jkaufman@dispatch.com.
This article originally appeared on The Columbus Dispatch: Ohio State NIL collectives raised millions in months after launch
