As a student-athlete, receiving Name, Image, and Likeness (NIL) money opens up exciting opportunities. With increased financial earnings comes the chance to make a meaningful impact on your community and those causes that matter to you. One way to channel this influence is by creating a foundation. Building a foundation is not just a way to give back; it’s also a powerful tool for shaping your legacy, supporting the people and causes you care about, and managing your public image as an athlete.
In this article, we’ll explore how to create a foundation as a student-athlete with NIL money and why doing so can be a smart move for your future.
What is a Foundation?
A foundation is a non-profit organization that you establish to support charitable causes. The foundation can donate money to various causes, create programs that help people in need, and engage in community service projects. Foundations are typically funded by individual donations, grants, or personal income. If you are receiving NIL income, you can allocate some of your earnings to your foundation to make a positive difference in the lives of others.
Why Should You Consider Creating a Foundation?
1. Leaving a Legacy
Establishing a foundation allows you to create a lasting legacy beyond your athletic career. Many athletes, such as LeBron James and Serena Williams, have used their fame and earnings to create organizations that give back to their communities in meaningful ways. By creating a foundation, you can do the same. Your foundation can support the causes that are closest to your heart, whether that’s education, youth development, or health and wellness.
2. Supporting Causes You Care About
Your foundation can focus on the issues you care deeply about. For instance, if you grew up in an underserved community, your foundation could work to improve education, provide scholarships, or fund local youth sports programs. Or, if you’ve experienced mental health challenges during your career, your foundation could focus on supporting mental health services for student-athletes.
Having a cause that you’re passionate about also helps you stay grounded, reminding you of why you’re working hard both on and off the field.
3. Enhancing Your Public Image
As a student-athlete receiving NIL income, your public image matters. How you are perceived by your fans, peers, and sponsors can shape the opportunities you receive both during and after your athletic career. Creating a foundation shows the world that you are committed to making a positive difference. It highlights your sense of responsibility, leadership, and compassion.
4. Tax Benefits
In addition to the personal and social benefits, creating a foundation can offer potential tax advantages. Donations you make to your foundation are often tax-deductible, which can help reduce your overall tax liability. This is especially beneficial for student-athletes earning substantial NIL income. Working with a financial advisor can help you structure your foundation and donations in a way that maximizes these benefits.
5. Developing Skills for Life After Athletics
Running a foundation is an excellent opportunity to develop skills that will serve you well after your athletic career. You’ll gain experience in leadership, management, and fundraising. You may also build relationships with community leaders, business professionals, and sponsors, all of whom can support your future endeavors.
Steps to Creating a Foundation
Now that you understand why creating a foundation can be beneficial, let’s walk through the steps of how to do it.
1. Define Your Mission
Before you do anything, you need to decide what your foundation will focus on. What causes or issues are most important to you? Do you want to support education, youth development, sports, health, or something else entirely? Your mission will guide everything you do, from fundraising to outreach.
Take time to think about the specific problem you want to address and how your foundation can make an impact. Once you’ve defined your mission, write a clear mission statement that will serve as the foundation’s guiding principle.
2. Create a Legal Entity
To form a foundation, you’ll need to create a legal entity, usually a 501(c)(3) nonprofit organization. This process involves several steps:
- Choose a name for your foundation that reflects its mission.
- Incorporate your foundation by filing paperwork with your state. Each state has different requirements, so you’ll need to do some research or hire legal help.
- File for tax-exempt status with the IRS to ensure your foundation qualifies as a nonprofit organization, making it eligible for tax-deductible donations.
- Draft bylaws for your foundation, outlining how it will operate and be governed.
This process can take some time and requires careful planning, so working with an attorney or legal expert is advisable.
3. Establish a Board of Directors
Most foundations are governed by a board of directors, which helps make important decisions about the organization. As a founder, you can serve as a member of the board, but it’s also essential to recruit other individuals who are passionate about your cause and can provide valuable insights. Board members can help guide the foundation’s mission, make decisions about where funds should be allocated, and ensure the foundation is operating effectively.
4. Raise Funds and Start Giving Back
Once your foundation is up and running, you’ll need to raise funds to support its activities. This can be done through personal donations, sponsorships, or fundraising events. As a student-athlete, you can also use your NIL earnings to fund the foundation’s activities.
With funds in place, your foundation can start working toward its mission. Whether you’re awarding scholarships, funding programs, or donating to other nonprofits, you’ll be able to make a tangible difference in the community.
5. Stay Involved and Adapt Over Time
Once your foundation is up and running, it’s crucial to stay involved. Running a foundation requires regular attention, whether that’s overseeing the organization’s finances, working with partners, or planning events. Over time, you may want to adapt the foundation’s mission or expand its focus to meet new challenges or opportunities.
Conclusion: Building a Legacy Beyond NIL
Creating a foundation as a student-athlete receiving NIL money is one of the most impactful ways you can give back and build a legacy. Not only does it allow you to support the causes you care about, but it also enhances your public image, provides valuable tax benefits, and helps you develop skills for life after athletics. By following the steps outlined above and staying committed to your mission, you can make a lasting difference in the world, both during your athletic career and long after.
Written by Pat Brown, MBA, Former D1 Player