Scholas Occurrentes had been due to receive a $10,000 donation from the CONMEBOL federation for every goal and penalty kick scored during the Copa America, the South American championship which kicked off on Thursday in Chile.
But after several current or former CONMEBOL executives were indicted by the United States as part of its sweeping investigation into allegations of corruption at the heart of Fifa, the charity said it no longer wanted to be part of the so-called "Goals for Schools" program.
"Scholas Occurrentes will abstain from accepting any funds until the criminal investigation clarifies things and will stand by its founding decision to work together with football and all other sports to transmit the values of a culture of encounter," the charity's director, Jose Maria delCorral, said in a statement.
He said it was important the investigation complete its work to "safeguard the integrity of our institutions and of football, which was and remains a significant cultural vehicle for our youths and our peoples."
Pope Francis launched Scholas Occurrentes in 2013 to promote education in poor communities through sports, the arts and technology.
The Argentinian is a lifelong football fan and devoted supporter of Buenos Aires club San Lorenzo.
The wide-ranging scandal at Fifa led the president of the world football governing body, Sepp Blatter, to resign last week, just days after winning re-election.
Those indicted in the US investigation include CONMEBOL executive committee members Rafael Esquivel of Venezuela and Jose Maria Marin of Brazil, as well as former federation presidents Eugenio Figueredo of Uruguay and Nicolas Leoz of Paraguay.