Is it permissible to organize a competition that does not require a specific entry fee, but rather requests optional donations to cover the costs of organization and prizes, with the possibility of the organizers benefiting from these donations if it is permissible?

It is not permissible to spend money on competitions except in what has been explicitly stated by the Lawgiver, such as competitions involving horses, camels, and arrows, and what aids in material or spiritual jihad, like competitions for the Quran, Hadith (definition), and Fiqh. This is based on the Prophet, peace and blessings be upon him, who said: "There is no sabaq except in archery, or with a hoof, or aatha." And sabaq is the prize given to the winner. In these competitions only, it is permissible to give prizes to the competitors, whether from their own money or from an external party, and the organizers have no right to the money except with the consent of those who donate it.