Texas One Fund donors to earn Longhorn Foundation loyalty points is 'game changer'

Texas One Fund donors will soon receive a tangible return on their NIL investment.

The Texas athletic department announced last weekend that current members of the Longhorn Foundation will earn loyalty points for any donations to the NIL collective starting July 1. Collectives across the country have worried about donor fatigue as the Year 2 anniversary of NIL inches closer.

Even if wins on the field or court aren’t following NIL dollars, trying to make the most of a donor’s financial assistance has become paramount to collectives. This is the solution for the Texas One Fund.

“It’s just another great asset for us,” executive director Patrick “Wheels” Smith told On3 in a phone interview Monday. “Not only are we doing good things in the community. Not only are we helping our student-athletes, we’re also giving donors the benefit which is a game changer. As of now, it’s still a tax-deductible donation. The ability for them to get a tax deduction and loyalty points is a really good thing.”

How will Longhorn Foundation disperse points?

Texas athletic director Chris Del Conte made note of the new wrinkle in his June 16 newsletter to the fanbase. Plans are in place, however, for an official announcement on July 1. The Longhorn Foundation is under the athletics umbrella and not separate from the university, unlike the 12th Man Foundation which is an independent charitable entity supporting Texas A&M.

The Longhorn Foundation’s points system help determine priority for season ticket seat selection and upgrades for all sports, including the Red River Showdown, football road games, postseason events and football parking.

The current breakdown for donations awards five points per $100 for Longhorn Excellence gifts. Another two points are given for $100 donated toward annual seat-related gifts. Smith said there has not been a decision made on what point system

“We need to work that out, we’re going to differ to the Longhorn Foundation,” he said. “It’s going incentivize people to give. It’s really a huge benefit for us – it’s something people have been asking about for a long time. People get hit up by athletics for a bunch of stuff they need and of course hit up by us to help our student-athletes, help charities. The ability for someone to say, ‘Yes, you get loyalty points for this as well’ is just a benefit.”

Having a successful collective can be crucial to winning. The top-funded collectives aim to have a bankroll of $8 million for an 85-scholarship roster. More collectives at the Power 5 level are operating in the $3 million to $6 million ballpark, though.

Communicating with Del Conte and Texas coaches will only help One Fund’s NIL efforts. Smith said the collective has been in constant communication with the Longhorns’ compliance office. Football coach Steve Sarkisian and men’s basketball coach Rodney Terry met with donors and fans earlier this month at the Austin Country Club to fundraise for the collective.

The new Texas law creates another layer of protection for any communication around the institution and collective. More specifically, Del Conte can now easily share with boosters what they’ll be getting in return for their NIL donation.

“And any new ruling that allows us to talk to [Chris] Del Conte about, here’s what we’re trying to do help us raise money,” Smith said. “Here’s what we’ve been able to do for our athletes. He’s able to say, ‘Ok, great, these donors can get loyalty points for that.’ That’s huge. It really is. It does give us a little more competence.”

Why Texas is able to distribute priority points

Texas Gov. Greg Abbott signed House Bill 2804 into law 10 days ago. The revised NIL legislation provides cover for state schools from being punished by the NCAA for any NIL activity.

While the governing body views the relationship between collectives and institutions’ fundraising as impermissible, the new state law provides cover to state schools. Texas A&M has rolled out The 12th Man+ Fund, which is run through the longstanding, independent 12th Man Fund. Texas Tech launched a relationship with The Matador Club in the past few days, committing to promote and assist money-generating efforts for the NIL collective.

More than six months ago, five separate Texas-focused collectives came together to form the Texas One Fund. Smith confirmed Monday that the One Fund does have nonprofit status with the IRS and is still accepting tax-deductible donations. The revenue service released a 12-page memo earlier this month stating donations made to nonprofit NIL collectives are not tax-exempt.

Some collectives have put their 501(c)(3) activity on pause but most have not skipped a beat. While the memo is a warning, it’s not actionable until the IRS revokes a nonprofit’s status or sets a precedent in tax court.

“I think people want to give,” Smith said. “People like what we’re doing and what our mission is. People understand the importance. They know it helps the kids, and they want to win. So I think the more structure that evolves and the way it goes that allows real-world applications of it, the better. And this is one.”