Understanding Tax-Deductible Donations for School Sports Fundraisers

What Are Tax-Deductible Donations for School Sports Fundraisers?

Fundraising for youth and high school sports teams is essential for providing student-athletes with the resources they need, but understanding the nuances of tax-deductible donations can be complex. That’s why we’re here with this guide to help clarify how tax deductible Contributions work.

What Makes a Donation Tax-Deductible?

For any donation to be tax-deductible, it must be made to or for a government organization or subdivision thereof, or a tax-exempt organization as defined by Section 501(c)(3) of the Internal Revenue Code.  Therefore, because public schools are subdivisions of a government organization, donations made to or for a public school qualify as tax-deductible Charitable Contributions. Likewise donations made to or for a private school or other non-governmental organization that is tax exempt under Section 501(c)(3), also qualify as tax-deductible Charitable Contributions.  

Important to note when purchasing products:

Additionally, when fundraising efforts include purchasing items, such as pretzels or popcorn, the total amount may include a portion that is considered a donation.  For example, if the fair value of the item is $15 but the purchase price is $25, the excess $10 is considered a Charitable Contribution and is tax deductible.

Not sure if your private school or non-governmental organization is tax-exempt? Here’s what you should do:

The IRS Exempt Organizations Select Check tool (https://apps.irs.gov/app/eos/) an online resource provided by the Internal Revenue Service (IRS) that allows users to verify the tax-exempt status of nonprofit organizations. This tool enables individuals and organizations to confirm whether a particular nonprofit entity is recognized as tax-exempt under section 501(c)(3) of the Internal Revenue Code. By using this tool, donors can ensure that their Contributions are made to qualified organizations and are eligible for tax deductions. 

Guide for Public School Coaches and Employees

1. Educate your donors: Inform potential donors that their donations and a portion of their purchases are tax-deductible, providing them with peace of mind and an incentive to donate.

Guide for Private Schools and organizations Coaches and Employees

1. Verify your organization’s 501(c)(3) status: Ensure your group is part of a registered 501(c)(3) organization. You can verify this through the IRS Exempt Organizations Select Check tool mentioned above, or linked here.

2. Educate your donors: Inform potential donors that their donations and portion of their purchases, are tax-deductible, providing them with peace of mind and an incentive to donate.

3. Grant applications: Explore and apply for grants available exclusively to 501(c)(3) organizations to boost your fundraising efforts.
   

For any donation to be tax-deductible, it must be made to or for a government organization or subdivision thereof, or a tax-exempt organization as defined by Section 501(c)(3) of the Internal Revenue Code. Therefore, because public schools are subdivisions of a government organization, donations made to or for a public school qualify as tax-deductible Charitable Contributions.

How are fundraising companies able to say they are tax-deductible?

Fundraising companies generally act as agents for their clients performing services such as campaign coordination, advertising and payment processing.  Fundraising companies ensure that funds raised go to a public school or a 501(c)(3) organization to guarantee tax deductions for donors.