It’s hard to tell exactly what an NIL collective does. Schools promote them in their advertising as ways to help drive the success of your favorite team as well as provide income to the players.

There are lots of ways to contribute. One-time or monthly donations. Small dollar or big dollar. You can give directly to a specific athlete, a whole team, or the whole athletic program. If you want a football player to come to your birthday party, it can make it happen. Depending on the school, your donation may get you special access to players, team apparel, discounts on tickets, and a lot more.

With all this going on, it’s hard to tell whether you’re dealing with the collective or the school. D1 schools have large NIL teams working with the athletes, along with employees of the collective. Other schools have minimal or zero staff and rely completely on the collective to manage the NIL process.

So what exactly is an NIL collective?

In my opinion, a collective is a sales and marketing company. They work with athletes to market their brand, social following, and influence to boosters, businesses, and fans.

Take a minute and think about everything that goes into landing an NIL deal. You have to find possible partners, figure out the value you have to offer, decide how much that is worth, and then negotiate and sign a binding contract.

Now imagine doing that when you are 18 years old.

This is where the collective can help. The athlete can license their NIL rights through the collective. This allows the athlete to focus on school, competing, and enjoying their college experience. It’s up to the collective to go out and find partners to generate income for the student. This is what a sales and marketing company does.

Today, most schools don’t have the infrastructure to support a collective. The good news is that NIL is growing rapidly, and the public demand for college sports has never been greater. I think it won’t be long until schools at all levels will find ways to provide NIL opportunities for their athletes, whether it’s through a collective or a different approach, schools will have to use NIL to land top talent.

The Evolution of NIL Collectives

Not long after the NCAA issued its interim policy on NIL rights, the Gator Collective was launched to support the University of Florida’s athletic program. Since then, the number of collectives has grown to over 250 nationwide.

The basic role of a Collective hasn’t changed. They pool money to distribute to student-athletes for the use of their NIL rights. How they go about doing that has changed quite a bit. In the first couple of years, we saw the launch of various types of marketplaces that promoted themselves as a place for athletes and businesses to connect and create NIL deals. Others took a non-profit approach, paying athletes to support and generating donations for charitable organizations.

The marketplace approach never really gained much traction. On the upside, it provides access to NIL for all athletes. They could create a profile and offer a variety of products and services to generate income. On the downside, it relies on the athlete to do all the leg work to make the deal. The idea that a soccer player juggling the demands of practice, games, academics, and college life would have the time to market themselves in a competitive marketplace against thousands of other similar athletes really didn’t make sense.

Most marketplaces struggled to generate enough revenue to operate, and people realized quickly that a marketplace alone was not a sustainable model.

The demise of the non-profit approach came from the IRS. It didn’t take long for the IRS to determine that these entities did not meet the standard for tax-deductible organization. It’s a little unfortunate because they seemed to support many worthy local charities. For the most part, schools are converting from non-profit to for-profit collectives.

There have been a lot of changes for for-profit collectives, too. In the beginning, there were little to no restrictions on how much money was spent, who it was spent on, or if there were real services provided. The power conference schools leaped out in front of everyone. They already had wide alumni networks and infrastructure in place, along with boosters with deep pockets willing to spend whatever it took to win.

Inevitably, it was up to the legal system to sort everything out. The House vs. NCAA settlement from last summer is the first step toward a regulated process with a better-defined role for collectives. We are already seeing the changes take effect. NIL fundraising activities are shifting from big dollar boosters and corporate donations to a broad-based, multi-level program targeting a wider population. Now, the general public can make monthly donations to their favorite programs.

Collectives have evolved to become the marketing arm of major college sports programs. In the beginning, collectives were simple donor groups pooling funds to support their favorite team. Today, collectives are complex organizations that play a pivotal role in college athletics, player compensation, and recruitment.

Is forming an NIL Collective right for your program?

When collectives first started, most people assumed that they were exclusively for big, well-funded D1 programs. Today, forming a collective can benefit athletic programs at any level.

There are several key factors to consider before launching an NIL collective. The first thing that most often comes to mind is the level of competition. There is an obvious benefit for D1 programs to having a collective, but any level program - D2, NAIA, JUCO, can leverage NIL depending on these key factors.

Community & Donor Support: A strong, passionate donor and alumni base is the foundation of a sustainable NIL program. An engaged local business ecosystem willing to support your athletes will help keep the program thriving without big corporate sponsorships.

Institutional Commitment: School leadership must be committed to leveraging NIL. For many schools, NIL is an additional expense that must be managed in tight department budgets. NCAA, state, and local laws, as well as education requirements for athletes, are a big commitment for any program deciding to enter the NIL marketplace.

Peer Institutions Benchmarking: What is the rest of your conference doing? Who do you compete with for talent? You may have to establish a collective to stay competitive.

Athlete Interest and Readiness: Are current athletes and recruits asking about NIL opportunities through your program? Having a collective can be a deciding factor that tips the scale in your favor. Having access to NIL in some form can be important to talented athletes looking to build their brand and generate income. As for current athletes, do they have the skills and ability to market themselves? Smaller schools will have to rely on the athletes to drive engagement while they build up the collective.

In the end, a university must carefully balance these factors to determine if an NIL collective aligns with its athletic goals and financial realities. If the conditions are right, an NIL collective can be a powerful tool for athlete empowerment, recruitment, and program growth.