How SGOs and Schools Partner to Expand Access to 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.

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.

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.

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.

Partnerships between SGOs and schools typically follow a predictable cycle:

1. Introduction & Alignment: The SGO outlines expectations, timelines, and eligibility requirements. The school reviews program fit and readiness.
2. Onboarding: Schools assign a point-person (often someone in admissions, finance, or the front office). SGOs provide resource toolkits and guidance.
3. Family Outreach: Schools share the SGO’s application information with families. SGOs remain available for questions and clarification.
4. Application & Award Cycle: Families apply through the SGO. Schools verify enrollment. SGOs award scholarships and provide the necessary reporting.
5. Ongoing Communication: SGOs share updates, timelines, donor reporting, and offer support throughout the year.

Partnerships thrive when roles are clear and complementary:

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

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.

Now that Nebraska has officially opted in to the FSTC Program, and a few other states such as Tennessee have given verbal indications that they plan to participate, learning the SGO model matters more than ever. It helps schools:

• Avoid confusion later as more states opt in and details roll out
• Prepare leadership and boards for emerging policies and governance decisions
• Quickly activate if their state’s governor opts in
• Better understand the national direction of school choice initiatives
• 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.

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.

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.

The Federal Scholarship Tax Credit (FSTC) program, passed as part of the One Big Beautiful Bill, creates a new opportunity for families and donors to support K–12 education. The program allows individual taxpayers to receive a federal income tax credit for contributions to approved Scholarship Granting Organizations (SGOs), which then award scholarships for qualified educational expenses, such as tuition, tutoring, and technology.

While the Treasury Department will issue final regulations over the next year, schools and dioceses can take meaningful steps now to prepare. Planning ensures Catholic and faith-based communities are ready to support families and donors as this new opportunity takes shape.

The Federal Scholarship Tax Credit allows individuals (not corporations) to contribute to approved SGOs and claim a dollar-for-dollar credit on their federal income taxes. The contributions fund K–12 scholarships for families whose income is within 300% of Area Median Income (AMI)—a level that includes many middle-income households.

Take these steps to understand better how FSTC will impact your school:

• Designate a point person to track updates and communicate program basics to school leaders.
• Connect with your state Catholic conference or CAPE affiliate for coordinated guidance.
• Begin compiling a list of SGOs operating in your area.

The Federal Scholarship Tax Credit caps contributions at $1,700 per taxpayer each year, or potentially $3,400 for joint filers (pending Treasury guidance). The cap is designed to keep the program broad and sustainable, and it can be stacked with state tax credit programs if managed correctly.

Take these steps to build clarity and confidence around FSTC giving:

• Educate donors about the difference between federal and state credits, including the “no double-dipping” rule.
• Coordinate with diocesan communications teams to ensure consistent language across parishes and schools.
• Start building a donor education toolkit that includes key messages and sample outreach templates.

Each state must formally opt in to the Federal Scholarship Tax Credit program before families and donors can benefit. The state will then certify SGOs to receive contributions and distribute scholarships.

Take these steps to get a full picture of your state’s FSTC participation:

• Monitor your governor’s and legislature’s positions on participation.
• Stay connected to associations that engage in state-level discussions about the opt-in process.
• Be ready to share updates with donors and families as your state’s decisions progress.

Strong relationships between schools, dioceses, and SGOs will make implementation smoother once the Federal Scholarship Tax Credit program begins. SGOs will manage compliance and donor reporting, while schools will help families understand eligibility and apply for scholarships.

Take these steps to communicate with SGOs about FSTC:

• Reach out to SGOs in your state to establish or renew partnerships.
• Ensure your systems can securely share enrollment or eligibility information if needed.
• Begin developing communication materials that explain how the FSTC complements existing state programs.

Donor education will be critical to prepare for the Federal Scholarship Tax Credit program. Many donors will want to understand how this new federal credit interacts with their state’s tax credit program and how their contribution directly helps students.

Take these steps to prepare donors for FSTC:

• Coordinate messaging with diocesan development or stewardship offices.
• Prepare simple materials that outline how donations flow from the donor to the SGO and ultimately to scholarships for students.
• Encourage donors to consult their tax advisors once Treasury releases final rules.

Schools that plan ahead will find it easier to manage family communication and recordkeeping once Federal Scholarship Tax Credit scholarships begin to flow.

Take these steps to prepare your staff for changes related to FSTC:

• Confirm that your financial aid or tuition management systems can track scholarship awards accurately.
• Train your admissions and business office teams on how federal scholarships will integrate with existing tuition or aid processes.
• Establish a clear internal point of contact for scholarship-related questions.

Families will look to schools for clear information once the Federal Scholarship Tax Credit becomes available. Helping them understand who qualifies, how to apply, and what documentation they may need will build trust and confidence from the start.

Take these steps to prepare FSTC information for families:

• Begin creating simple family FAQs that explain the purpose of the FSTC and how it may help with tuition.
• Plan to host short informational sessions once more details are available.
• Reassure families that participation will be voluntary and that schools and SGOs will guide them through the process step by step.
• Coordinate with SGOs to ensure consistent messaging on eligibility and timing.

Treasury and state agencies will release more details about the Federal Scholarship Tax Credit program in 2026, including SGO certification and reporting procedures. Staying informed, and participating in conversations where possible, will help schools and dioceses anticipate what’s next.

Take these steps to stay informed about FSTC updates:

• Subscribe to Treasury and FACTS updates for ongoing rulemaking information.
• Attend webinars or training sessions hosted by FACTS and partner organizations.
• Share key takeaways with leadership teams and boards.

The Federal Scholarship Tax Credit represents one of the most significant opportunities in decades to expand access to private and faith-based education. By understanding the basics, building partnerships, preparing families, and setting up systems now, schools and dioceses can ensure they’re ready to lead when the program launches

Want more insights on what the Federal Scholarship Tax Credit means for schools, dioceses, and SGOs?

Check out our recent webinar, Federal Scholarship Tax Credit: From Legislation to Implementation, to hear from FACTS experts and partners on the latest Treasury updates and learn how to prepare your community.

For a closer look at what is defined in statute and what still requires Treasury rulemaking, download our FSTC Rulemaking Readiness Guide.

When it comes to E-Rate funding, many private and faith-based schools assume the program is out of reach or too complicated to bother with. Over the years, we’ve heard a lot of myths, from “E-Rate is just for public schools” to “The paperwork is overwhelming,” and even “It’s not worth the time for what we’d save.”

The truth? E-Rate is one of the most underutilized resources for private schools. With the right support, the process is much simpler than most expect. Schools working with FACTS have saved thousands of dollars a year on their internet and technology bills, often with less effort than they imagined.

Let’s break down some of the most common E-Rate myths and share what you really need to know to take advantage of this valuable program.

Myth #1: “E-Rate is only for public schools.”

Fact: Most non-profit private, parochial, and faith-based schools qualify for E-Rate. If your school is non-profit and serves K–12 students, you’re likely eligible for valuable discounts.

Myth #2: “The application is too complicated and takes too much time.”

Fact: The process can be complex, but with an experienced partner handling the paperwork and deadlines, schools report significant time savings and much less stress.

Myth #3: “The savings aren’t worth it.”

Fact: Schools working with FACTS have saved an average of $3,000 per year. These funds can be redirected to classrooms, programs, and student needs.

Myth #4: “We missed the deadline, so we’re out of luck.”

Fact: E-Rate is an annual program. There is always another opportunity to apply, and it is never too late to start planning for next year.

Myth #5: “If we accept E-Rate, we’ll have to follow a lot of new rules.”

Fact: E-Rate requirements are clear and manageable, especially with support. FACTS guides schools through compliance so you can participate with confidence.

Ready to see what’s possible for your school?
Learn more about how E-Rate works and see how much your school could save this year.

The newly signed Federal Tax-Credit Scholarship Program, originally introduced as the Educational Choice for Children Act, marks a major step forward for school choice. For scholarship granting organizations (SGOs), this legislation opens the door to expanding access to K–12 private education through donor-funded scholarships. But with that opportunity comes increased responsibility.

SGOs are tasked with growing their operations, managing more applications, and ensuring full compliance with state and federal requirements. It’s a big lift, and FACTS is here to help you carry it.

FACTS already supports more than 120 SGOs, including many participating in state-based programs. We understand the day-to-day realities SGOs face: limited staff, complex eligibility rules, strict timelines, and increasing expectations from donors and oversight agencies.

Our Application Builder & Eligibility Verification tool can help you manage application intake, verify eligibility, prioritize awards, track compliance, and keep families informed all within one secure, customizable system.

Your organization might manage multiple scholarship programs simultaneously, each with different eligibility criteria, award levels, and reporting requirements. That’s why our tools are flexible and easy to configure. You’re in control of your own process.

The experience starts with a white-labeled application portal that reflects your branding. Families can apply online using any device, upload required documentation, and receive real-time updates on their application status. Meanwhile, your staff has full visibility and control over each step in the process.

If your programs require more advanced verification, FACTS supports secure document collection, IRS and Ed-Fi income validation, and manual review workflows. You can customize award logic, implement prioritization rules, and manage waitlists as needed.

FACTS helps SGOs handle the entire process, from start to finish. Our system makes it easy to:

• Accept and organize applications by program
• Collect and verify tax forms, IEPs, and other documentation
• Apply your rules for award prioritization and eligibility
• Assign and track awards in line with your scholarship structure
• Track award offers and waitlists
• Send decision letters and updates automatically
• Allow families to accept awards through the portal
• Monitor scholarship distribution by region, school, or income level
• Prepare reports for auditors, boards, and regulators

You work hard to make the scholarship process accessible, and we do too. FACTS provides U.S.-based multilingual family support by phone, email, or text. Most families reach a live agent in under two minutes. Automated status updates through the family portal help reduce confusion and ensure families stay informed at every step.

SGOs are navigating increased scrutiny and evolving policy. FACTS helps you stay ahead with a platform backed by Nelnet’s enterprise-level infrastructure. You get the peace of mind that comes with robust data security, fraud prevention, and tools designed to meet changing state and federal expectations.

We also provide training and guidance for your team, so you can adjust quickly when new requirements emerge.

SGOs are no longer just pass-through organizations. You are essential connectors between donors, families, schools, and policy. The systems you use reflect your values and determine your ability to scale with integrity and impact.

FACTS is proud to partner with SGOs ready to lead, not just comply. We are here to support your mission, help you grow, and equip you with tools that make scholarship operations stronger and more sustainable.

If your SGO is preparing to participate in the Federal Education Tax Credit Program or manage existing scholarship programs across multiple states, let’s connect. FACTS can help you reduce administrative burden, improve the family experience, and ensure you are set up to grow.

Ready to explore how FACTS can support your SGO? Start the conversation here.

As school choice expands at the state level, new momentum is building at the federal level through the Educational Choice for Children Act (ECCA). This proposed tax credit program could unlock up to $5 billion annually in private donations to fund K-12 scholarships. 

The ECCA has gained significant traction and was recently included in the U.S. House’s budget reconciliation process, though it is not yet a law. The most recent version of the bill restores important protections for religious liberty, an issue closely watched by private schools and scholarship organizations.

At FACTS, we’re monitoring these developments closely and helping schools and Scholarship Granting Organizations (SGOs) prepare for what could be a historic shift in national education funding.

The ECCA is designed to make private education more accessible to families by providing federal tax credits to individuals and businesses that donate to Scholarship Granting Organizations (SGOs). These SGOs then provide scholarships to eligible students for tuition and other educational expenses at participating private schools. As federal lawmakers debate the future of school choice, the ECCA could represent the most significant national expansion to date. 

The ECCA is a federal initiative that would create up to $5 billion annually in tax credits for donations to SGOs. In turn, these organizations fund scholarships for K–12 students to attend private schools across the country, including faith-based schools. The program aims to complement existing state-based school choice programs and address the rising demand for educational alternatives. 

Here are the core elements of the ECCA program: 

• Annual Volume Cap: $5 billion in federal tax credits, available from 2026 through 2029.
• Donor Eligibility:  Only individual income taxpayers may participate. Corporate donors are not eligible.
• Donation Limit: Up to 10% of adjusted gross income (AGI) or $5,000, whichever is greater. 
• Student Eligibility:  Must be eligible to attend public school and have a household income at or below 300% of Area Median Income (AMI).
• Qualified Expenses:  Tuition, fees, educational materials, therapies, dual enrollment, tutoring, and more.
• State Set-Aside: 10% of the annual volume cap is allocated evenly across all 50 states and reserved for residents of those states.
• First-Come, First-Serve Allocation: Credits are awarded in the order contributions are received, with no allocations after December 31 of each year. 
• Sunset Clause:  The program is authorized through 2029 and would require reauthorization to continue beyond that.

The most recent draft of the ECCA restores specific language that protects the religious liberty of participating schools. This ensures that faith-based schools can continue to operate according to their religious mission and beliefs while participating in the program. The addition of this language addresses concerns from religious organizations and school leaders who advocated for clear protections. Additional adjustments include: 

• Reduced funding cap from $10B to $5B annually
• Program is now time-limited: 2026–2029 
• Corporate donors removed
• Scholarships are currently treated as taxable income (expected to be fixed)
• New admission mandate for special education students was added (also expected to be challenged)

For SGOs and private schools, these legislative changes to the ECCA present a new funding stream that could significantly expand access to private education. However, it also brings operational expectations, including:

• SGOs must verify income, distribute funds on a timeline, and manage audits.
• Schools may need to review admission policies to ensure eligibility.
• Donors may ask new questions about tax credits, including state versus federal programs and their impact.

For SGOs and private schools, the restoration of religious liberty protections is significant. It means faith-based organizations can confidently participate in the ECCA without compromising their values or operational autonomy. At the same time, the enhanced federal tax credit could dramatically increase the pool of available scholarship funds, expanding access for more families.

Being ready early means being positioned to grow.

SGOs need to know they’re working with a trusted leader in school choice and scholarship management. FACTS is actively monitoring developments in the ECCA legislation and preparing solutions to support schools and SGOs. We’re actively monitoring the ECCA’s progress and working to:

• Ensure FACTS solutions are ready for ECCA federal compliance
• Educate clients with summaries, webinars, and FAQs
• Provide guidance on eligibility, documentation, and distribution requirements

FACTS’ eligibility verification and program management tools are designed to help organizations navigate new compliance requirements brought on by ECCA changes, ensure accurate reporting, and maximize scholarship impact.

Whether you’re a long-time SGO partner or just getting started with FACTS, our goal is to make your transition into any new federal program seamless.

Want to learn more about the ECCA and what it means for your organization? Watch this on-demand webinar, hosted by FACTS, where we break down the latest developments, answer your questions, and discuss how FACTS can help you navigate these changes. If you’d like to discuss how your organization can prepare for the ECCA, reach out to your FACTS representative or contact us directly.

As federal and state scholarship landscapes evolve, FACTS is here to help you adapt and thrive every step of the way.

Q: Can donors claim both state and federal tax credits?
A: Yes. If donations are made to separate programs, donors may be eligible for both.

Q: Are scholarships really taxable?
A: The current draft says yes, but it is widely expected this will be corrected in a future revision.

Q: Will schools be required to change their admissions policies?
A: Possibly, depending on how the special education requirement survives reconciliation.

Q: Who qualifies as a donor?
A: Only individual taxpayers, not businesses or corporations.

Q: What if my SGO already participates in a state tax-credit program?
A: You may qualify under a “grandfathering” clause or meet the new federal criteria. More guidance will come as the bill progresses.

This information is for general guidance only and should not be considered legal or tax advice. For specific compliance questions, please consult with your legal or tax advisor.