It appears that the crowdfunding site FanAngel has found a way to legally get around the NCAA’s rules to make donations to college athletes to keep them in school.
From ESPN:
New crowdfunding site FanAngel will allow fans, among other things, to pay college athletes to stay in school through donations that are given to the athlete when his or her eligibility expires.
“If you wanted Marcus Mariota to stay in school for his senior year, you could give $20,” said Shawn Fojtik, who dreamed up the site after finding out there wasn’t a way for Chicago Bears fans to give Brian Urlacher the money he wanted to play a final season at the salary he desired.
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Fojtik said that when a fan commits a pledge to an athlete, that money is immediately taken out of the account. Eighty percent of the money will be held for that athlete if that athlete does choose to stay in school, 10 percent will be given to that athlete’s teammates, and 10 percent will be earmarked for charity and scholarship funds. The money is given to the athlete when that athlete’s eligibility expires.
“There’s no acceptance on the athlete’s part, and we aren’t specifically promoting any athletes,” he said. “We are using their name as anyone would as part of fair use.”
Fojtik said there is no way for athletes to contact his company or crowdfund on their own through his site. In fact, Fojtik doesn’t want to talk to anyone who has any connection with the athlete until it’s time to pay out the money.
Since fans are donating their money, instead of investing, FanAngel has established its business category as broadcast media with the Internal Revenue Service. All donation amounts to specific athletes will be made public, though some can choose to give anonymously.
The founder of the site also met with the NCAA and his site doesn’t break any rules, but I’m sure the NCAA is quite upset and is going to change soon. The site gets a 9% transaction fee and if the player doesn’t stay in school then the money is refunded.
Here are the NCAA’s current rules on crowdfunding.
Something tells me this will be huge for college football and could have quite an impact.
