My daughter belongs to a dance company that has 501(c)(3) status. Each member has fundraised to go on tour to London with the company. My child has received donations from her sponsors, and due to the recent terrorist attacks in London, I have decided not to send my daughter. The Dance Company has informed me that they plan to keep my child's donated funds and put those funds towards another child. My question is can the Dance Company use donations ear-marked for my child for another child? My child's sponsors are requesting their donations back. What can I do or how should I proceed?
This is the classic case on the dividing line between contributions which are tax-deductible and those which are not. If the contributions were "ear-marked" for your child, they are probably not deductible. If they were given to the organization as general support to help its participants get to London, they probably are deductible. If they were given for general support, they can be used for anyone, not just your child. Check the literature, if any, used in the solicitation. The donors may ask for their money back, but they may have no right to get it back. It is a public relations problem either way for the organization.
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