The complete operating system for Scholarship Granting Organizations
The most generous individual education giving tax credit in American history.Start your own SGO, have our team run it, or join one we already operate.
Three groups at the table.
All three come out ahead.
The money comes out of federal tax a donor already owed, so nobody ends up out of pocket. Here is what each of the three walks away with.
Every dollar back.
Give up to $1,700 — $3,400 filing jointly — and it all comes back off your federal tax bill.
- Dollar-for-dollar
- Carries forward 5 years
- Repeats every year
Tuition, paid direct.
Scholarship tuition arrives in full, straight from the fund to your school — with no entity of your own to form, certify, or audit.
- Paid direct to you
- Days to onboard
- $0 to start
Most schools miss this: ClearPath Advance, the fundraising suite that makes the ask for you. Explore Advance →
School guideA smaller bill.
Families earning up to 3× their area's median income pay less at the school they already chose.
- Free to apply
- No SSN required
- English & Español
Either it funds a student, or it funds the IRS.
The credit comes off federal tax you already owed, so the money leaves your account either way. The only question is whether it pays tuition at a school you chose. Give more than you owe this year and the rest carries forward — up to five years.
Whose SGO is it, and who runs it?
Compare all three side by sideTwo questions, three answers. Whose SGO is it — yours or ours? And who does the operating work — your staff or our team? Federal tax-credit scholarships don’t begin until January 1, 2027, so no family has been funded under any of them yet. Two of the three are open to start now, because forming and certifying an SGO takes months and that work begins today; the third opens once the SGO we are standing up is certified. All three end in the same place: a family with a scholarship.
Start your own SGO and run it
Your nonprofit, your board, your scholarship committee, your brand on every receipt. We are the infrastructure underneath — formation, donors, applications, disbursements, and the 90/10 proof.
- Your committee writes the eligibility rules and decides every award
- Your brand on the giving pages, receipts, portal, and tax documents
- The administrative share of each gift is your revenue, not a vendor's
The trade
Months to launch · formation, certification, board, and an annual audit · you staff the back office
Choose this if: A diocese, school network, community foundation, or nonprofit that wants to set scholarship policy and has the staff to operate the program.
Open now
See what running your own takesOwn the SGO. Hand us the work.
The same entity, board, and brand as Model A — but our team does the operating work: gift processing and receipts, application intake, income verification, disbursement, per-state 90/10 books, and the state reports.
- No back office to hire for a job that has no veterans yet
- Your committee still decides every award — that one never moves
- Bring it in-house later; the entity, donors, and history are already yours
The trade
Still months to form and certify · the administrative share pays our team rather than yours
Choose this if: An organization with the donors, the mission, and a real board — but nobody to run a compliance operation five days a week.
Open now
Explore ClearPath ManagedJoin our SGO instead of forming one
Skip the entity, the certification, and the audit entirely. Your school joins the SGO we are standing up as a ClearPath Partner School, and keeps its own branding on the page your community gives through.
- Days to onboard at $0 — nothing to form, certify, or audit
- Scholarship tuition paid straight to your school
- Your only recurring job: confirm a student is enrolled
The trade
You don't own the entity · the SGO's committee decides awards · donor preference guides, never binds
Choose this if: A single school — or one without staff to spare — that wants families funded without building a nonprofit first.
Whichever you choose, at least 90% of every qualified contribution reaches students. The platform, the SGO’s own administration, and a managed engagement are all paid from the ≤10% operating allowance Section 25F sets aside for exactly that — never from the 90%.
One platform underneath all three.
Whichever way you come in, the software running the SGO is the same — whether your staff drives it or ours does. These are not separate purchases to weigh up. They are what a compliant Section 25F operation actually requires, already built and already talking to each other.
Take the platform tourFor schools · Any SGO
Someone still has to raise the money
ClearPath Advance is the fundraising suite that does it — campaigns, a donor CRM, print materials, tracked QR codes, and an ask that shows each family what the gift actually costs them. It works with any SGO, including one that isn’t ours.
Explore ClearPath AdvanceStart here · Free
Not sure which path is yours?
Almost nobody arrives knowing. We work through whether an SGO should be yours at all, who ought to run it, and what your state actually requires. We sell all three paths, so we have no reason to push one — and if the answer is to wait, we say so.
Schedule a free consultationBuilt for the audit
you hope never comes.
Every SGO eventually answers to a state regulator, an IRS examiner, or its own board. ClearPath is engineered so the answer is a download, not a scramble — every record provable, every decision documented, every dollar reconciled.
Tamper-evident audit log
Every donation, award, and disbursement is hash-chained. Alter one record — even with database access — and the chain breaks visibly. The platform verifies it on demand.
One-click evidence package
A date-ranged PDF bundle for any inquiry: donations and receipts, awards with board votes, disbursements, the 90/10 worksheet, and a cryptographic integrity attestation.
Anonymized board voting
Board members vote on applicant pools without names, schools, or donor information — each vote e-signed and attached permanently to the award record.
Conflict-of-interest enforcement
Annual e-signed disclosures from every board member, with automatic recusal when a disclosed relationship touches a vote.
Dual-control disbursements
Above your threshold, money moves only with a second approver. Segregation of duties is enforced by the platform, not a policy memo.
Methodology vault
Every compliance judgment call — AMI sources, expense interpretations — versioned with rationale and effective dates. When you're asked “why,” the answer is on file.
Built like financial software — because it is.
A new federal tax credit.
A real compliance infrastructure requirement.
The Education Freedom Tax Credit — created by the One Big Beautiful Bill Act as Section 25F of the Internal Revenue Code, effective January 1, 2027 — allows individual taxpayers to claim a dollar-for-dollar federal tax credit for donations to qualifying Scholarship Granting Organizations. This is not a deduction. It is a full credit against federal tax liability, one of the most powerful individual giving incentives ever enacted.
You may also see it called the Federal Scholarship Tax Credit (FSTC, the IRS's official label) or the Educational Choice for Children Act (ECCA) — four names for the same program.
Dollar-for-dollar federal tax credit per individual donor, per year
Maximum credit for married couples filing jointly
Minimum portion of all donations that must fund student scholarships directly
Carry-forward period for unused credits
Maximum area median gross income for student household eligibility
What is an SGO?
A Scholarship Granting Organization is a 501(c)(3) nonprofit whose primary mission is to collect donations and distribute them as scholarships to income-eligible K–12 students for qualified educational expenses. Qualified expenses mirror Coverdell ESA definitions: tuition, fees, books, supplies, equipment, tutoring, special needs services, and technology — at both private and public schools.
Any qualifying 501(c)(3) may form an SGO — churches, school networks, dioceses, educational foundations, and community organizations. States must voluntarily opt in to the program and submit lists of approved SGOs to the IRS, which means regulatory requirements vary significantly by state.
The market moment
There is no federal cap on total tax credits claimed or total donors. If millions of taxpayers participate, tens of billions of dollars could flow through SGOs annually — and the organizations with compliant infrastructure in place on day one will define the program in their states.
The IRS is finalizing Section 25F regulations through 2026 and states are establishing their opt-in frameworks in parallel. With activation set for January 1, 2027, the organizations in formation now are the ones that will be accepting donations on day one — and collecting donor pledges well before it.
And because a multistate SGO is one entity with a segregated account per state — donors designate a state, money never crosses state lines — the platform models that structure natively: per-state designation, committees, and 90/10 reporting, with a national roll-up for the board.
Know the moment your state moves.
Opt-in legislation is moving through statehouses right now. Tell us your state and we’ll send a short email when its status changes — plus formation deadlines and program guidance as January 1, 2027 approaches.
Running a compliant SGO is more complex than it looks
Most organizations that can launch an SGO — churches, school networks, dioceses, community foundations — have no existing infrastructure for any of what federal law requires. The stakes of getting it wrong are significant: donors can lose their tax credits, and organizations can lose their approved SGO status.
Federal Requirements
- 501(c)(3) status with primary mission aligned to SGO purpose
- Full compliance with Section 25F of the Internal Revenue Code
- No scholarship earmarking — arm's-length award decisions legally required
- Priority system enforcement: returning recipients first, then siblings of current recipients
- Continuous 90/10 spending ratio monitoring — a hard federal floor
- Qualified expense verification for every individual scholarship disbursement
- Precise IRS-compliant tax credit receipts for every donor (errors cost donors their full credit)
- Multi-school distribution: awards must reach 10+ students across multiple schools
State-Level Requirements
- State opt-in and SGO approval process — procedures vary dramatically
- Additional eligibility rules layered on top of federal minimums
- Annual state compliance reporting, format varies by state
- State-specific income verification standards
- Approval timelines vary: some states approve in weeks, others in months
- Some states require additional auditing or financial reporting
- Rules still being established in many states through 2026
- Ongoing regulatory monitoring as state frameworks evolve
Operational Requirements
- Income verification using 300% of area median gross income by county or metro
- Scholarship application portal accessible to all eligible families
- Eligibility screening and documentation collection for each applicant
- Award decision support tools for SGO board governance
- Scholarship disbursement processing directly to families
- Donor CRM with per-donor $1,700 credit limit enforcement
- Recurring giving management, renewal campaigns, and married couple optimization
- Complete audit trail maintenance for IRS documentation and state reporting
The organizations best positioned to run an SGO — churches, school networks, dioceses — typically have no dedicated compliance staff for any of these functions. Attempting to build this infrastructure internally while managing ministry, academics, or community work creates significant regulatory and operational risk.
This is what we handle →Organizations building SGOs from the ground up
Full use case detailCatholic diocese or multi-school Christian network
The Challenge
A diocese with 15 schools across a metro area wants to create an SGO to fund scholarships for low and middle-income families. Coordinating scholarship distribution across 15 campuses, managing thousands of applicants, ensuring no earmarking violations when parish families donate expecting to help "their" school, navigating the state's SGO approval process, and building donor management infrastructure from scratch — each of these is a significant compliance challenge on its own.
How SGO Guide Helps
SGO Guide handles the entire operational backend for the diocesan SGO: state registration, branded donor portal, applicant screening and income verification, award decision support, multi-school compliance tracking, and 90/10 monitoring across the full network. Diocese administrators focus on ministry, not compliance.
The easiest way for a school to start: join an SGO we run.
Forming your own SGO is months of legal work. A partner school skips it: plug into a scholarship granting organization we operate, for $0. Your school gets a branded giving page and QR code, donors can name your school as their preferred school, and your one recurring job is the thing only a school can do: confirm a student is enrolled.
The SGO carries every Section 25F obligation — state listing, segregated accounts, 90/10, receipts, audit. A donor’s preference guides awards; it never binds them.
$0 to start
No entity to form, no certification to chase, no audit to fund. Add your school in five minutes; the SGO vets and approves once the program opens.
Your page, your QR, your widget
Branded to your school, hosted by the SGO, embeddable on your site. Every gift earns the donor a federal tax credit.
Tuition paid straight to you
When the committee awards one of your students, the SGO pays the tuition directly to your school — on a ledger you can see, never invoiced to the family.
One-click enrollment confirmation
Families who name your school land in your portal. Confirm enrolled or not; the SGO does income, awards, and payments.
Where does your state stand?
30 states have opted in, and 2 are studying it. We track every statehouse and update this map as states elect in — hover a state for its status, click through for the full guide.
The program activates January 1, 2027.
Formation takes 14–20 weeks. Do the math.
30 states have already opted in, and the IRS is finishing the Section 25F rules. An organization that starts formation now can still be accepting donations on January 1 — and with pledge campaigns, your donors don’t have to wait for launch day to commit.
Formation Window Opened
- IRS public comment period on Section 25F regulations closed
- State opt-in processes opened and approval frameworks established
- First wave of SGO formations and state applications filed
- Platform infrastructure built, tested, and deployed
The Last Full Formation Window
- Formation plus state approval still completes before January 1 for organizations starting now
- Pledge campaigns open — donors commit today, convert at launch
- Platform configuration runs in parallel with state approval
- Compliance stress-testing before the first live donation
Section 25F Activates
- Dollar-for-dollar federal tax credit becomes available to donors
- Collected pledges convert to donations automatically
- Tax credit receipts must be generated correctly from day one
- Organizations without compliant infrastructure cannot operate
First Full Program Cycle
- First annual scholarship cycle runs
- State reporting requirements commence
- IRS documentation for donor tax credit claims due
- Program scaling — organizations positioned early capture the most
Starting this month still gets you to January 1. Waiting until fall doesn’t.
Formation takes 14–20 weeks including state approval. And you don’t have to wait for launch to build your donor base — pledge campaigns collect commitments now and convert automatically on day one.
Don’t launch to an empty room.
Until January 1, 2027, no SGO can take a qualifying gift — but every SGO can collect commitments. ClearPath Pledge, part of ClearPath Donors, runs your pre-launch pledge drive: supporters commit today — from just an email address to a pledge secured with a saved payment method — and every gift processes automatically the moment Section 25F activates.
Your first tax year starts with a charge queue, not a call list.
Explore ClearPath PledgeSecured pledges
A card or bank account saved at pledge time — nothing charged until launch day, then processed automatically with a same-day receipt.
Multi-year ladders
The $1,700 credit resets every tax year. One pledge schedules an annual gift each January — each year earning its own full credit.
State-conditional pledges
Supporters in undecided states pledge anyway: their gift only processes if their state opts in. Objection, converted to pipeline.
A real forecast
Secured vs. soft vs. conditional dollars, live on your Growth dashboard — your pledge book is your January revenue forecast.
Talk it through before you decide.
Tell us about your organization and we’ll set up a consultation on your formation path, your state, and the timeline. It costs nothing and there is nothing to sign — and if it’s useful, we’ll walk through the platform on the same call.
What happens next
We read your submission and respond within one business day
A working session, typically 45–60 minutes — your situation, not a sales pitch
Which of the three paths fits, what your state requires, and what the timeline is
You leave with a clear recommendation — including when the answer is to join an SGO rather than form one, or to wait