Is it proper to set up a 501(c)(3) scholarship fund, where scholarships will be used to send children to a specific for-profit camp? The scholarship fund will be funded by donations, and the scholarship application process would be open to the public.
The IRS would probably deny (c)(3) exempt status to an organization such as this. It has denied charitable status for scholarship funds for specific for-profit schools. Providing heat and electricity for people who otherwise can’t afford it and would be without shelter if the utilities were not paid for them has a very different ring of charity than providing summer camp at one for-profit organization. If there were a scholarship fund for summer camping experience for low-income kids that occasionally made a grant to a for-profit, it might pass muster with the IRS. But designating all of the grants to the same for-profit would probably be considered an improper benefit to the for-profit and cause the denial of charitable status.