All, it appears that there is a shift in IRS allowance in donations for specific athletes that comes through the N G B.  For years and years the N G B could receive donations earmarked for a specific athlete and the donor could get a tax donation for that amount.  That is no longer the case and in fact by continuing to handle donations in that manner we will put USATT’s  (501 c 3) corporate status at risk.

The overwhelming amount of traffic in this area comes to us from our Paralympic athletes. My intent with this communication is to send Deborah’s G ray’s assessment to our Para athlete pool and suggest the following ways to handle it:

1. Athletes can continue to receive monies from family and friends and others, but it should now go directly to the athlete involved.
2. Donors can send funds directly to USATT but it can not be earmarked for a specific athlete but rather to the entire team or program.  The donor in this case can get a letter as a tax deduction from USATT.  Athletes need to understand that the total donations received for the team or program will be evenly distributed among all the athletes. G oing forward, all athletes would benefit from donations received regardless of who was responsible for raising the donated funds. The athletes would need to decide ahead of an event what the total would be for a particular trip to have it either self funded or funded through donations or a combination of both sources.  As an example, let’s say that 10 athletes want to participate in a Para event in Canada .  The total cost would be $10,000.  Each athlete would then need to either self fund $1,000 or secure donations for the team at the $10,000 level – or a combination of both means to reach the needed $1,000 per individual.

Below you will find a memo I received from Deborah G ray , USATT Finance Director, which prompted me to send you this communication.  I hope that this explains the shift we must make in addressing athlete donations.  We remain steadfast in our determination to provide services and support to our Paralympic athlete pool.  If you have specific questions, please feel free to contact Deborah or myself directly.

Best regards!  mc

Michael D. Cavanaugh
CEO - USA Table Tennis
1 Olympic Plaza
Colorado Springs, CO   80909
719 866 4583 ext 3
ceo@usatt.org

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Mike:

During our recent audit by the USOC, it was brought to my attention by the USOC auditor that a charitable donation made to USATT which is earmarked for the benefit of a specified individual is not considered a tax deductible donation by the IRS. 

Further, the USOC auditor suggested that USATT is putting its 501 (c) (3) tax-exempt status in jeopardy by acting as a conduit for “gifts” made for the benefit of specific individuals and by providing a tax deductible donation letter to the donor.

IRS guidelines offer a pivotal test for this situation: to consider whether the charitable organization (USATT) receiving the contribution has full control of the donated funds and the discretion as to their use, so as to ensure that the funds will be used to carry out the charity’s functions and purposes.

An interpretation of this guideline to enable USATT to provide a tax deductible donation letter to the donor would be the donations are not distinctly marked by the donor for the benefit of a designated individual, but rather for the “Paralympic Team.”

Another option is the donor understands their donation is not tax deductible per IRS rules but is considered by the IRS to be a “gift” to the specified individual and therefore the donor could simply send their “gift” to the individual direct.

The donations we’ve received to date have been primarily for specific Para athletes and specific Paralympic events.

Deborah