The NCAA Tournament is a cash cow for the NCAA. Since it owns and controls the Tournament, the NCAA doesn’t have to split revenue with corporate sponsors (as in football and baseball), and as a result, over 90% of the NCAA operating budget is derived from this event.
When the NCAA signed its first billion+ contract with CBS, the schools (especially the non-basketball powers) lobbied for a more equitable system to distribute that money than the free-for-all that was in place. Thus, the “basketball fund” was born.
The basketball fund shares most of the tournament revenue (after the NCAA brass take their cut) with every conference.