We have a 501(c)(3) youth sports club. Can donations be used to cover the costs of an in-need player (uniform, fees, etc.) or do all donations have to be spread so that all players (regardless of need) benefit equally? We have been told that we cannot have a “scholarship player.”
There is certainly no federal tax reason that you can’t use contributions to help cover the costs of players of financial need. That’s the whole concept of donations. There might be a league rule about the use of gifts, but it does not seem likely that a league rule would prevent such use of gifts. The key is that the donations cannot be earmarked for the benefit of a specific individual. If so, they cannot be deducted as charitable contributions.