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Nonprofit Law/Fees vs. donations for youth sports clubs


A youth sports club with 501(c)(3) status collects fees from the families of its players to pay for coaches, facilities, etc.  Are there legal constraints on the club requesting and/or accepting donations instead of fees to cover its expenses?  The obvious advantage of donations would be that players' parents could deduct the expenses in their tax returns, as well as request matching donations from employers that have matching programs, thereby raising more money for the club. If there are legal reasons to require parents to pay "fees" rather than donations, to what extent could the former be minimized and the latter be maximized (again, to save on taxes and enable donation matching)?

FYI, I have seen this being done by a local high school sports team, and was wondering what the issues are and why this practice is not more widespread.

The issue is similar to tuition.  For details see
which has examples of donations to schools that might be not deductible as they appear to be tuition payments.
Especially note on page 2:
---Start of Excerpt--
However, solicitation for contributions from parents of applicants are made during enrollment of students or while the application is pending, and children of parents who do not make or pledge a "contribution" in the specified amount are not accepted. In Situation 3, the organization admits or readmits a significantly
larger percentage of applicants whose parents made contributions than applicants whose parents have not made contributions.
---End of Excerpt--

Harvey Mechanic
Attorney at Law

P.S. This response is intended to be a general statement of law, should not be relied upon as legal advice and does not create an attorney/client relationship.

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Harvey Mechanic


DO NOT GIVE ME INFORMATION THAT YOU WANT KEPT CONFIDENTIAL. I am an attorney and I volunteer time to answer general questions about U.S. Federal income tax issues of nonprofit 501(c)(3) public charities only. Those questions could be about establishing and maintaining legal requirements for such non-profit organizations in the United States, including Internal Revenue service filings and requirements. I will not be working on this free forum to answer questions about Nonprofit's possible unrelated or for-profit businesses or how to fill out forms. This forum is only for general questions about federal tax law, not as the law applies to your specific situation. If you do not make your question public then I will not be spending much of my donated time on answers that would not benefit the public. If you have other questions, please contact me at I will reply from my email. In any case, do not reveal confidential information to me until after I have contracted with you to provide personal legal services. My responses on this forum are intended to be general statements of law, should not be relied upon as legal advice, and do not create an attorney/client relationship. For me to consider your individual situation and how the law applies, I would need to gather extensive information about the situation. To search my previous answers you can do a Google search by "" without the quotes and then add your search terms before hitting enter.


I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar and I have maintained my status with the Bar since that time.


B.S. Columbia University in New York City, 1970

J.D. (Law Degree) Brooklyn Law School, 1990 -- Cum Laude.

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