A Growing Opportunity for Private Education
Across the country, school leaders are exploring ways to expand access, increase affordability, and support families seeking a high-quality private education. Scholarship Granting Organizations (SGOs) are central to that effort. Whether operating within an existing state program or preparing for future opportunities under the Federal Scholarship Tax Credit (FSTC), understanding how SGOs partner with schools is an essential first step.
This blog explores what SGOs do, how partnerships with schools work, and why schools benefit from collaborating with SGOs, especially in a future FSTC environment.
What Is an SGO?
A Scholarship Granting Organization (SGO) is a nonprofit entity that:
- Raises tax-credit eligible donations
- Awards scholarships to eligible students
- Ensures program compliance and reporting
- Serves as a bridge between donors, families, and schools
SGOs provide the infrastructure, accountability, and operational support required to run tuition-assistance scholarships at scale.
Why Do Schools Partner with SGOs?
Schools partner with SGOs to make scholarships more accessible, sustainable, and compliant. Instead of each school managing complex scholarship workflows alone, they can leverage an SGO’s systems, expertise, and fundraising structure.
| Without an SGO | With an SGO |
|---|---|
| School manages everything alone | SGO manages scholarship administration |
| High administrative burden | Reduced workload on school staff |
| Limited donor pathways | Access to tax-credit eligible donations |
| Greater compliance risk | Standardized, auditable processes |
The Added Value Under FSTC
If a state opts in to the Federal Scholarship Tax Credit program, SGOs will play a critical role. Under FSTC, SGOs help:
- Facilitate a new source of tax-credit eligible donations, including $1,700-per-donor contributions
- Manage federal compliance, documentation, and reporting
- Support schools in scaling scholarships more effectively than acting independently
Partnering with an SGO gives schools a future-ready structure to respond immediately if their state participates in FSTC.
How Do SGOs and Schools Work Together?
Partnerships between SGOs and schools typically follow a predictable cycle:
- Introduction & Alignment: The SGO outlines expectations, timelines, and eligibility requirements. The school reviews program fit and readiness.
- Onboarding: Schools assign a point-person (often someone in admissions, finance, or the front office). SGOs provide resource toolkits and guidance.
- Family Outreach: Schools share the SGO’s application information with families. SGOs remain available for questions and clarification.
- Application & Award Cycle: Families apply through the SGO. Schools verify enrollment. SGOs award scholarships and provide the necessary reporting.
- Ongoing Communication: SGOs share updates, timelines, donor reporting, and offer support throughout the year.
Roles and Responsibilities
Partnerships thrive when roles are clear and complementary:
| Partner | Key Responsibilities |
|---|---|
| SGO | Fundraising, donor compliance, application and award processing, reporting |
| School | Communicates with families, verifies enrollment, identifies a school contact |
| Families | Apply, submit required documentation, and stay engaged in the process |
How Do Donors Collaborate with SGOs?
SGOs do not replace a school’s donor relationships. Instead, they enhance them by providing a compliant giving pathway for donors who want their contributions to qualify for a tax credit. Schools continue to build and steward donor relationships, while SGOs handle the legal and reporting framework that makes those gifts tax-credit eligible.
This collaboration creates a win-win:
- Donors receive a clear, confident giving experience
- Schools expand available scholarship dollars
- SGOs ensure compliance
Two Common Award Models
There are two widely used approaches in SGO programs:
School-Guided Award Model: Schools help determine scholarship amounts for eligible students
SGO-Directed Award Model: The SGO sets award amounts, and the school verifies enrollment
Both models work effectively when expectations are clear up front.
Why Learning This Now Matters
Even though no state has opted in to FSTC yet, learning the SGO model now helps schools:
- Avoid confusion later
- Prepare leadership and boards for emerging policies
- Quickly activate if their state’s governor opts in
- Better understand the national direction of school choice initiatives
Prepared schools will respond faster and more confidently as policies evolve.
Together, SGOs and FACTS provide the structure and systems for efficiency, scalability, and sustainability, helping schools focus on what matters most: educating students and supporting families.
In an environment where educational policy continues to shift, FACTS helps schools and SGOs stay informed and prepared, ensuring they’re ready to respond to new opportunities for families.
What This Means for Schools and SGOs
SGOs and schools share a common goal: expanding access and opportunity for students and families. By understanding how SGOs operate, how partnerships function, and where each party adds value, leaders can confidently prepare for new scholarship opportunities, whether through state-level programs or a future federal tax credit. The stronger the collaboration, the more effectively families are supported.
Equip Your SGO for What Comes Next
As demand for scholarship programs grows, SGOs need tools that streamline application intake, eligibility verification, and documentation without sacrificing accuracy or efficiency. FACTS’ Application Builder offers a configurable, secure way to collect data, verify information, and manage applicants all in one place. It’s more than a form builder; it’s a scalable solution designed to strengthen your program as policies evolve.
Ready to simplify your scholarship eligibility and verification workflows? Explore the FACTS Application Builder today.
