UT Chancellor Donde Plowman is preparing Tennessee athletics for whatever the NCAA may throw at it.
On Friday, the UT board of trustees approved a plan by Tennessee-Knoxville to establish a nonprofit foundation. The nonprofit could be used for things regarding athletics, including providing student-athletes with name, image and likeness funds.
The fund could be used to pay salaries for athletes or help Tennessee athletics make the cut of wealthiest schools, if the NCAA trends in either of those directions.
In the proposal, the university cited the changing world of athletics for the change.
“UTK believes that there may be great benefit to creating a designated nonprofit entity that would be available to support its intercollegiate athletics program moving forward,” the board proposal read.
Plowman and the university will seek the board’s proposal before the entity becomes operational. The approval on Friday is just the first step to beginning the foundation.
“Most of our peers in the SEC have such a nonprofit that is associated with the athletic department,” Plowman said at the meeting, held at UT Southern. “Everything is changing so quickly — I don’t need to say that to anyone here in athletics — and we need to be prepared for some of those changes”
Revenue-wise, Tennessee athletics is in great shape. It enjoyed a record fiscal year in 2023, earning over $200 million for the first time in school history. Tennessee reported a budget of $183 million for the 2023-24 fiscal year at the trustee meeting.
How could the nonprofit be used?
The NCAA has proposed several actions for the future of college athletics. The proposed foundation would set the university up to be able to adapt to some of those changes.
One of those proposals was the possibility of separating schools based on wealth and forcing the higher-tier schools to pay athletes a salary. The proposed nonprofit foundation could do that.
“We need a mechanism to do that, so the foundation would be an example of our — we would put revenues from the athletic department to pay the students,” Plowman said.
Another example would be if athletic departments decide to rope NIL in-house. The foundation would give the athletic department funds to make that practical.
“It’s really an effort to try to be agile and be ready for the coming changes,” Plowman said.
On a more practical and common note, Plowman said the foundation could be used to iron out some operational inefficiencies. For example, if a piece of equipment — only made and offered by one company — was needed to be purchased, then the funds could be used for that as well.
Do other schools have nonprofit
foundations for athletics?
It is not uncommon. UTK’s proposal mentions that an “overwhelming majority” have foundations like the one proposed. It was mentioned in the meeting that 11 of the 14 SEC schools have a foundation, and Plowman added that Memphis has one as well.
The approval on Friday is just the first step for founding the nonprofit. Plowman mentioned the roadblocks they may hit and looking for the IRS to weigh in.
The board will meet again in June, calling Friday’s meeting “not the last bit at the apple.”
Until then, Plowman and Tennessee-Knoxville will continue to be prepared for whatever the future of college athletics is.
Editor-in-Chief Abby Ann Ramsey contributed to this report.
Required reading
NCAA pauses NIL investigations following preliminary injunction decision
Injunction granted in Tennessee vs. NCAA, court freezes NIL rules
Breaking down the state of Tennessee’s suit against the NCAA
State of Tennessee, NCAA conclude preliminary injunction hearing, expect decision in ‘short order’
Why Donde Plowman sent a letter to NCAA President Charlie Baker
UT athletics director Danny White speaks out on NCAA investigation
UT Chancellor Donde Plowman calls NCAA ‘morally wrong,’ fires back amidst alleged NIL violations
Report: Tennessee under NCAA investigation for NIL violations
