This is actually pretty interesting, and not entirely uncomplicated. The reason why Dayton moved to NCAA D-1 in the 1990s from playing at the NCAA D-3 level is that the NCAA passed a rule that says a school that plays NCAA D-1 in either men's hoops or football MUST play D-1 in both sports. The reason is that Dayton, of course, was D-1 in hoops and has long had a competitive program. In football, the Flyers at the D-3 level were kind of a dominant program, in the 1970s and 1980s as they reached the NCAA D-3 tournament championship game I think five times and won the darn title twice before the rule was passed forcing them to play D-1 football if they were going to stay with D-1 men's basketball. But there's actually more to this. Even though it plays D-1 football out of necessity, Dayton has ZERO football scholarships that they offer. None. A high school player cannot get a football scholarship to Dayton because there are none. That's I guess because when it was a D-3 program, Dayton of course had ZERO football scholarships as there are no D-3 football schlarships. Nevertheless, Dayton has had success playing at its D-1 (aka 1-AA) level so they are succeeding without football scholarships.
Anyway, the other point brought up ... a school has to be D-1 or D-2 o D-3 in ALL sports. That's a negative.
First of all, remove basketball and football from the equation because that's what the NCAA does. As for all other sports, let's use the University of Minnesota-Deluth as the example. They are the example because it won the NCAA D-1 men's ice hockey national championship last spring, just before Covid-19 shut everything down. UM-D plays at the NCAA D-2 level in every sport except men's ice hockey.
The NCAA allows a school to play ONE men's sport and ONE women's sport at the D-1 level, while playing at D-2 or D-3 in all other sports. Apparently, the most common "one-offs" are ice hockey and fencing.
Finally, and. yes this is long and boring, when it comes to D-1 football, in order to play at that level, a school has to average 15,000 fans once in a two-year period, otherwise it loses D-1 status. This I believe comes into play in a bizarre way in the Mid-American Conference. Because the league took ESPN'S money and plays on Tuesdays and Wednesdays instead of on Saturdays, attendance at the MAC schools' games is not close to that number. According to the NCAA, average home attendance for MAC teams in 2019 was 15,300 or so....just above the cut-off point. BUT, I believe I read stories about several schools in the MAC that actually buy tickets to their own games so can reach the 15,000 threshold. In other words, if NIU draws an average of 5,000 fans per home game, then the school pays for 10,000 additional tickets, and I assume that money goes like to the NCAA and/or the visiting or whatever. Clearly, the MAC schools feel it's better to play on TV than have more fans in the stands and go unnoticed on Saturdays.
Anyway, I just thought it was kind of interesting.