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.
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What to Watch For
In September 2026, the U.S. Treasury Department expects to issue the full Notice of Proposed Rulemaking (NPRM) for the Education Freedom Tax Credit—the rules that taxpayers and SGOs can rely on for the 2027 tax year. Stay tuned for what that means for your organization.
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.
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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