Unfortunately the umbrellas were donated for the fundraiser. I’ve been told that Scotchguard pulled their product from the market for a while and now they’ve come back with a new formula that doesn’t contain the toxics the previous formula had.

I called the manufacturer and 3M and they both said that soap and water using a sponge will remove the Scotchguard coating but I find that hard to believe.  

I wouldn't remove it. I'd find another umbrella without scotchguard on the material. Scotchguard is one of those compounds that makes fabrics water resistant, yet we don't know the long term effects on biological systems, even in small amounts. See the article called "The Pollution Within" in National Geographic, October 2006. You can also look into the book: Exposed, which is about the toxicity of everyday materials. I believe the CDC has been recently testing people for over 300 toxins and chemicals (pthalates in plastic toys, flame retardents, scotchguard, Teflon, etc).

Hope this is helpful.