Probably the key to the evaluation is the way that the IRS defines “educational” in this context:
7.25.3.7 (02-23-1999)
Educational Purposes
2. The regulations under Reg. 1.501(c)(3)–1(d)(3)(i) define education as:
A. "the instruction or training of the individual for the purpose of improving or developing his capabilities"
B. "the instruction of the public on subjects useful to the individual and beneficial to the community."
In particular, the definition is not restricted to “intellectual” capabilities or the like. Club sports could certainly be viewed as improving or developing an individual’s athletic capabilities (just as, say, a capella groups could be viewed as improving or developing an individual’s musical capabilities).
John has put the relevant IRS citations into a document (attached).
(It’s worth noting that sororities and fraternities (social sororities and fraternities, that is) are something of a special case, since their status under the tax code doesn’t allow them to accept tax-deductible contributions, and the IRS is quite reasonably concerned about a donor trying to use a college or a university as a pass-through to make a gift to a fraternity or sorority tax-deductible. In particular, gifts to support fraternity or sorority housing are not tax-deductible, except under two incredibly narrow exceptions, which I could summarize if necessary. On the other hand, gifts that support educational purposes and would qualify as tax-deductible don’t become non-deductible just because the students whose improvement or development is underwritten are members of a fraternity or sorority.)
So the determination, for club sports or for other clubs, would consider whether the organizations “serve exclusively educational purposes, even if they offer incidental social or recreational activities” (again, with “educational” encompassing the purpose of developing or improving an individual’s capabilities.)
My US$0.02 worth; the usual disclaimers apply.
Good luck!
Alan
Alan S. Hejnal
Data Quality Manager
Smithsonian Institution - Office of Advancement
600 Maryland Avenue SW, Suite 600E
P.O. Box 37012, MRC 527
Washington, DC 20013-7012
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From: Advancement Services Discussion List <
FUNDSVCS@LISTSERV.FUNDSVCS.ORG> On Behalf Of Jessica Collins
Sent: Monday, April 22, 2019 12:50 PM
To:
FUNDSVCS@LISTSERV.FUNDSVCS.ORG
Subject: [FUNDSVCS] Giving to Club Sports
Good Afternoon,
In the past, I had asked for clarification on donations to Greek Life and student activities that were not educationally based. I understand that for these types of gifts, we cannot accept them as an organization due to IRS guidelines of accepting "agency" gifts. What I failed to ask during that time, however, was clarification on why it is OK to accept gifts for "club sports" and how they differ from these other types of donations.
I just want to be absolutely sure that what we are accepting donations for is fair to the organization and the donor moving forward so we are offering equal and consistent messaging.
Thank you,
Jessica R. Collins
Director of Advancement Services
University of Lynchburg