Running or thinking about starting a scholarship granting organization (SGO)? Or building your state’s process for participating in the Education Freedom Tax Credit (EFTC) program? Here’s what you should know.
In July 2025, Congress passed the Educational Choice for Children Act (ECCA), creating the Education Freedom Tax Credit (EFTC) program (also known as the Federal Scholarship Tax Credit) under 26 U.S.C. § 25F. States participate by having their governor submit a list of qualifying scholarship granting organizations (SGOs) to the U.S. Treasury each year. As of September 2026, 30 states have formally opted into the program. Starting January 1, 2027, donors will be able to claim a $1,700 federal tax credit for gifts to a certified SGO.
Latest News
Treasury Releases Rules
The U.S. Department of the Treasury and IRS released proposed rules for the Education Freedom Tax Credit (EFTC), bringing families one step closer to new education opportunities beginning in January 2027.
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Our webinar, “Federal Scholarship Tax Credit Rules: From Release to Operational Reality,” is a practical briefing on what the proposed rules mean for SGOs and for state leaders preparing for the 2027 launch.
Resources
SGO Guidance Memorandum
This memo walks states through a step-by-step process for reviewing organizations and determining SGO eligibility.
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SGO Simulator
This operating cost simulator is an interactive calculator that models your organization’s real operating costs.
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Tech Platform Guide
Choosing a platform is the easy part. This guide helps you decide on structure and operations before you pick a vendor.
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Provider Partnership Guide
This agreement and guidance document help SGOs set clear expectations with education providers.
LEARN MOREGuidance for States
States need a process for reviewing organizations and determining whether they meet the federal requirements to appear on the state’s SGO list. The SGO Guidance Memorandum walks states through that process step by step, and the SGO Application puts it into practice—together, helping states move the EFTC from policy to practice.
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Plan Your Operating Budget
Founders rarely anticipate the full range of costs—transaction fees, technology, accounting, staff—until they’re already serving donors and students. The SGO Simulator models how those costs shift as your donor and student counts grow, and lets you compare covering costs independently versus sharing that burden.
READ MORE TRY THE SGO SIMULATORChoose Your Tech and Operating Model
Evaluating scholarship-administration platforms feels like the first big decision—but the harder work is operational clarity: what experience families should have, what to manage in-house versus outsource, and how fast you expect to scale.
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Build Provider Partnerships
Many SGOs know they need an agreement with education providers but not where to start. The Provider-SGO Partnership Agreement offers a framework SGOs can adapt, and the Guidance Document walks through common scenarios, responsibilities, and questions to consider. Together, they help both sides know what to expect from each other.
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