A Disguised NIL Collective Folds After A “Scathing” Nonprofit Law Prof Blog Post

I told you last week that BPS Foundation was really just an NIL Collective disguised as a tax exempt sponsor of donor advised funds, and that the whole thing stinks like bovine defecation.  The Foundation helped generate charitable contribution deductions for donors whose tax advisors probably knew better.  The post commented on a series in Sportico, an online magazine devoted to the “business of sports.”  Honestly, I am just here to brag about it.  Because in a follow-up, Sportico reports that the BPS Foundation has decided to pack up and get out of Dodge faster than the Colts snuck out of Baltimore years ago.  And part of the reason, according to the report is my “scathing post on the Nonprofit Law Prof Blog.”  I tell you what, I told my wife she might better start calling me Donald Trump around the house. Here is part of the follow up report:

Ultimately, the deductions game proved too taxing. The BPS Foundation, the nonprofit partner organization to NIL collective operator Blueprint Sports, has written to supporters of at least one of its collective partners that it will close by year’s end, according to a copy of a letter obtained by Sportico. In a “special message to our unique donors,” Andrew Beisel, executive director of BPS Foundation, wrote that its decision to dissolve was due to the “unpredictable and ever-increasing risks associated with NIL nonprofit operations.”  Beisel revealed that the foundation has received letters of inquiry from the federal government, in addition to notices from multiple state attorneys general, and that the organization’s legal counsel had determined there was “no path forward” for it to continue.

Additionally, BPS Foundation paid Blueprint Sports $1.05 million in management fees, per the terms of their service agreement. Blueprint Sports currently maintains a portfolio of more than 25 for-profit NIL collectives, including those that support athletic departments at Penn State, UCLA, Arizona, Kansas and Stanford. It is not known the extent to which BPS Foundation has messaged about its intent to dissolve with other schools’ donors.

The reciprocal relationship between the Nevada-based company and foundation has drawn public scrutiny among nonprofit experts. In light of Sportico’s reporting last week, Darryll K. Jones, a tax law scholar at Florida A&M University, penned a scathing post on the Nonprofit Law Prof Blog.

Well, now.  Letters of inquiry [from the Service, I bet], multiple attorneys general, some very good investigative reporting by Sportico, plus a “scathing” blog post.  It probably wasn’t the blog post that finally forced the cutting and running, but in a month or two that’s what I’ll tell everybody.  I’m a law professor.  That’s what we do.  We wear corduroy blazers with patches on the elbows and take credit for stuff.  

darryll k. jones