# SGO Guide

> SGO Guide is the complete infrastructure and administration platform for Scholarship Granting Organizations (SGOs) operating under Section 25F of the One Big Beautiful Bill Act (OBBBA). The program goes by four names — the Education Freedom Tax Credit (EFTC, the common public name), the Federal Scholarship Tax Credit (FSTC, the IRS's official label), the Educational Choice for Children Act (ECCA, the congressional bill name), and Section 25F (the statutory citation) — all referring to the same federal scholarship tax credit.

## What Is an SGO?

A Scholarship Granting Organization (SGO) is a federally approved 501(c)(3) nonprofit that accepts donations from individual taxpayers and awards those funds as scholarships to eligible K-12 students. Under Section 25F of the OBBBA, donors to qualifying SGOs receive a dollar-for-dollar federal income tax credit (up to $1,700/year per taxpayer). SGOs must be approved by a state that has opted into the program, must award scholarships to students across at least 10 different schools, and must prohibit donor earmarking.

## What SGO Guide Does

SGO Guide provides the legal, operational, compliance, and software infrastructure that organizations need to form and run a compliant SGO. There are five things to choose between, and they divide on two independent questions — whose SGO is it, and who does the operating work?

Three of the five are ways in: **start your own SGO** (ClearPath Launch — your entity, your staff, and the administrative share of every gift is your revenue), **we run your SGO** (ClearPath Managed — you own the entity and your committee decides every award, our team does the operating work), and **join our SGO** (ClearPath Partner Schools — a school joins an SGO SGO Guide operates, owning nothing and auditing nothing; coming soon). The first two produce an identical legal entity and differ only in who staffs it.

The other two cut across all three: **ClearPath Advance** is the fundraising suite a school uses to raise the money and works with any SGO, including one not on ClearPath at all; **ClearPath Advisory** is a free consultation that works out which path fits, with nothing to sign.

Everything else listed below is a module of the platform — ClearPath — that runs the SGO once a path is chosen. These are not separate purchases and no organization evaluates them on their own:

- [ClearPath Launch](https://sgoguide.com/products/launch): start your own SGO. Full-service formation — 501(c)(3) structuring, governing documents, state opt-in registration, and Section 25F compliance setup — after which the organization runs the SGO itself on the platform. Open today.
- [ClearPath Managed](https://sgoguide.com/products/managed): fully outsourced administration of an SGO you own. The client holds the 501(c)(3), the state listings and the bank accounts; the client's board sets the eligibility rules and its independent scholarship committee decides every award; the client's name is on the giving pages, receipts, family portal and tax documents. SGO Guide's team does the operating work — gift processing and same-day receipts, $1,700 donor cap enforcement, bilingual application intake, 300% AMI income verification calibrated to the applicant's own metro area, docket preparation and conflict-of-interest screening, disbursement across the three channels, per-state segregated-account bookkeeping with continuous 90/10 monitoring, state annual reports, a monthly board close pack, and a continuously maintained audit evidence package. The hard boundary: SGO Guide never votes on a scholarship, because Section 25F requires awards to be made at arm's length by the organization itself. The managed fee is paid from the ≤10% operating allowance — the same share that would otherwise pay staff the client did not hire — never from the 90% that must reach students. Client staff and board keep full platform access and export throughout, and the engagement includes a documented transition plan to self-run operations. Open today.
- **ClearPath Donors**: Donor relationship management, Section 25F tax credit receipt generation, contribution tracking, and the $1,700 per-donor limit enforcement. Built multi-state-native: donors designate a state at the moment of giving (as §25F requires), qualified scholarship gifts and §170 operating gifts run as separate gift types, and every dollar is tracked in its state's segregated account. Contributions are cash only — card, ACH, check, wire, or cash — because only cash can be a §25F qualified contribution; donor-advised fund grants, appreciated securities, and crypto are not accepted anywhere on the platform. Includes [ClearPath Pledge](https://sgoguide.com/products/pledge): pre-launch pledge drives where supporters commit before January 1, 2027 — optionally securing the pledge with a saved payment method for automatic launch-day charging — with multi-year pledge ladders aligned to the annual credit, state-conditional pledges tied to the opt-in tracker, a founding-supporter recognition wall, and automated launch-day processing with same-day receipts.
- **ClearPath Scholarship**: End-to-end scholarship administration — student applications, income eligibility verification (300% AMI), arm's-length award decisions, returning student priority tracking, and compliant scholarship disbursement. Multi-state SGOs get per-state operations natively: applications route to the student's resident state's program, committees can be scoped per state (or run as one national committee over per-state dockets with separate priority waterfalls), and scholarships are funded only from that state's segregated account. Disbursement routes funds through three purpose-built channels based on expense type: (1) direct ACH to school for tuition — no receipt collection needed; (2) restricted prepaid card (MCC-controlled) for books, tutoring, and supplies — declined automatically at non-qualifying merchants, logged in real time; (3) ACH reimbursement with digital receipt verification for edge-case expenses. SGOs can restrict their scholarship use policy to a subset of Coverdell expense categories, which directly configures the disbursement channel mix.
- [ClearPath Partner Schools](https://sgoguide.com/products/partner-schools): the fastest way for a school to offer federal tax-credit scholarships — join an SGO the platform operates instead of forming one, at $0 startup cost. Each partner school is vetted and approved by the SGO, gets a branded giving page + QR code + embeddable widget, can be named by donors as their *preferred* school (advisory only — §25F prohibits earmarking and the SGO keeps full discretion), confirms student enrollment through a one-click school portal, and earns a partner fee (3% by default) on the gifts that named it — paid from the SGO's ≤10% operating allowance, never from scholarships. SGOs running ClearPath get the vetting queue, per-school fee ledger, preferred-school pool for the committee, and partner fees on the per-state 90/10 report.
- [ClearPath Advance](https://sgoguide.com/products/advance): the fundraising and marketing suite a school itself uses to raise tax-credit scholarship dollars — sold separately from the SGO platform and usable by a school whose SGO is not on ClearPath. Includes a donor CRM with household grouping and LYBUNT/SYBUNT segments, a multi-step campaign engine (email, text, print) with season playbooks and branching on opens/clicks/gifts, AI drafting in the school's own voice, a tax-credit ask engine that shows each household what a gift actually costs after the $1,700 federal credit (usually nothing), a print and direct-mail library (appeal letters, reply cards, pledge cards, bulletin inserts, table tents, yard signs, postcards, credit explainers) with variable data and optional print-and-mail fulfilment, uniquely tracked and repointable QR codes on every asset, ambassador/peer-to-peer pages and class challenges, stewardship automation (thank-you, January credit-claim reminder, 11-month renewal, lapsed win-back), and board reporting on participation, retention, ROI and cost per dollar raised. Every AI draft is checked against the §25F anti-earmarking rule and blocked if it fails. Advance deliberately does NOT offer paid raffles: the IRS treats a raffle ticket as consideration rather than a gift, so it earns no credit, and paid charitable raffles are unlawful or heavily licensed in many states — free-entry prize drawings and matching/participation challenges ship instead. Pricing: Essentials is free for approved partner schools; Pro is $199/month per school ([pricing](https://sgoguide.com/products/advance/pricing)); Advance Network is custom-priced for SGOs and adds a cross-school command center, a school recruitment CRM, template governance, managed campaigns, compliance oversight, and benchmarking ([Advance for SGOs](https://sgoguide.com/products/advance/for-sgos)). The subscription is paid from the school's operating budget and is NOT counted against the ≤10% operating allowance.
- **ClearPath Shield**: Ongoing compliance monitoring — 90/10 ratio tracking, no-earmarking enforcement, state reporting, and audit preparation. For multistate SGOs the 90/10 test runs per state account (as previewed by Treasury): each account tracks qualified contributions, scholarship outflow, and operating releases against the 10% cap with over-cap releases blocked, and the audit evidence package includes a per-state worksheet ready to furnish to every covered state.
- **ClearPath Insights**: Analytics and reporting — donor trends, scholarship impact, compliance dashboards, and board-level reporting.
- [ClearPath Advisory](https://sgoguide.com/products/advisory): a free consultation, and where almost everyone starts. It works out whether an SGO should be yours at all, who ought to run it day to day, what your state actually requires, and what the timeline looks like — plus state expansion, policy interpretation, and regulatory response for organizations already operating. There is no engagement to sign and nothing to buy at the end of it; because SGO Guide sells all three ways in, it has no incentive to push one answer, and if the right answer is to join an existing SGO or wait for a state to opt in, it says so.

[How to Start an SGO](https://sgoguide.com/how-to-start-an-sgo): The complete formation guide, and the canonical answer on this site for how to start a Scholarship Granting Organization. Five stages in the order they must happen — (1) the four internal decisions that shape every later document (new entity vs. an existing 501(c)(3), which states, the scholarship criteria, the year-one scale the operating model is built against); (2) legal entity formation (articles carrying SGO-specific mission language rather than generic charitable-purpose language, bylaws separating the award committee from donor development, EIN, an organizational board meeting whose minutes join the IRS package); (3) IRS 501(c)(3) recognition (the full Form 1023 for most SGOs, since 1023-EZ's receipts and asset limits exclude a meaningful scholarship program; four to six months of processing, effectively restarted by an information request; what a reviewer looks for); (4) state listing (a covered state must include the organization on the list it submits to the IRS — no gift earns a credit before it; 30 to 60 days in a state with a mature framework, open-ended in one still designing its process; requirements above the federal floor; separate applications and independent clocks per state); and (5) operational setup (receipting with unique donor numbers, area-based income verification, an arm's-length award workflow, disbursement that evidences qualified use, per-account 90/10 tracking, board and committee training). Also: an honest gate on whether the SGO should be yours at all, where the ten-students-across-multiple-schools rule usually settles it against a single campus; realistic timelines (four to six months on a clean run, nine to fifteen when the IRS returns questions or a state is standing up its listing process); a costs section whose operative number is not formation fees but the 10% operating allowance ($200K raised leaves $20K to run on, $1M leaves $100K, $5M leaves $500K), with the first partial year structurally unable to absorb launch costs; five failure modes that cost months; a nine-item day-one readiness checklist; and seven FAQs. Supersedes the retired blog post at /blog/how-to-form-an-sgo-step-by-step, which redirects here.

[SGO Software](https://sgoguide.com/sgo-software): What SGO software is as a category and what any of it has to do under Section 25F, written as a buyer's requirements list rather than a brochure. The four jobs no ordinary tool covers together: taking qualified contributions correctly (cash only, the $1,700 per-donor annual cap, a state designated at the moment of giving, receipts carrying an IRS-method unique donor number), deciding awards at arm's length (income verified against area median gross income, the statutory priority order, disqualified-person screening, a reconstructable decision record), moving money provably to Coverdell-qualified use (direct-to-school tuition, controlled channels otherwise, never cash to families), and proving compliance continuously (90/10 measured per state account in real time, over-cap releases blocked rather than flagged, a tamper-evident audit log). Then a nineteen-row checklist across five groups — donors and the credit, applications and awards, moving money, proving compliance, getting started and growing — each row pairing the requirement with what to listen for in a vendor's answer, including the rows where the honest answer is that ClearPath Advance is a separate product. Also the four platform modules over one system of record (Donors, Scholarship, Shield, Insights); that buying software is only one of three answers (run it yourself, own the SGO and have ClearPath Managed operate it, or join an SGO); that every fee in all three comes from the 10% operating allowance and never from the 90% that must reach students; and six FAQs covering what SGO software is, whether a donor CRM plus a spreadsheet can substitute, how it is paid for under the cap, and how multi-state runs as one entity with many accounts.

[Start or Join an SGO](https://sgoguide.com/start-or-join-an-sgo): The three ways to offer federal tax-credit scholarships, compared honestly. Model A — your SGO, you run it: independent nonprofits form the entity and run it on the software (their entity, their board, their scholarship decisions, and the administrative share of each gift is their revenue). Model B — your SGO, we run it: the same entity and the same board, with SGO Guide's team doing the operating work under ClearPath Managed; the client's committee still decides every award. Model C — our SGO, we run it: SGO Guide operates certified SGOs of its own that a school can join as a partner school in days at $0 (coming soon). Compares time to first gift, cost to start, who decides scholarships, whose brand donors see, flexibility, compliance burden, governance required, staffing, your share of a gift, and multi-state expansion, with the signals that usually decide it and an explicit "probably not you if" for each model. Models A and B produce an identical legal entity and differ only in who staffs it, so an organization split between them can form now and decide later. Fees in all three models come from the ≤10% operating allowance — shared by the platform, the SGO's own administration or its managed fee, and the 3% partner-school fee — never from the 90% that must reach students.

[Why SGO Guide](https://sgoguide.com/why-sgo-guide): How SGO Guide compares to the alternatives organizations consider — general fundraising software, scholarship application software, or a law-firm-plus-spreadsheets stack — across eighteen capabilities in six groups: raising from donors ($1,700 cap enforcement, unique-donor-number receipts, pledge campaigns, give-to-your-cap recurring giving, branded outreach kit with QR codes), operating across states (multi-state listing with per-state segregated accounts, per-account 90/10 monitoring, per-state or national committees), awarding scholarships (300% AMI verification, arm's-length awards, bilingual English/Spanish portals), moving money compliantly (direct-to-school ACH tuition payments, restricted scholarship debit cards, receipt-verified reimbursements), proving compliance (tamper-evident audit log, state annual reports and board dashboards), and getting started (formation/listing, regulatory tracking). Also states the three ways to work with SGO Guide — start your own SGO and run it on the platform, own the SGO and have SGO Guide's team operate it under ClearPath Managed, or join an SGO SGO Guide already operates as a partner school — plus the four-job lifecycle (Form → Raise → Award → Prove) and an honest when-we're-not-the-right-fit section.

## Who SGO Guide Serves

- Organizations forming new SGOs from scratch
- Organizations that want to own an SGO but not staff one, and hire SGO Guide to operate it
- Existing nonprofits adding an SGO function
- Faith communities, community foundations, and education advocates
- Schools that want to offer federal tax-credit scholarships without forming an SGO
- Single-campus schools, for whom joining an existing SGO is the only workable path (see [A Single School](https://sgoguide.com/single-school))
- Parents and guardians applying for a scholarship on behalf of a K-12 student
- Individual donors seeking to understand Section 25F (the credit is individuals-only and cash-only)
- State policymakers and researchers studying the program

## Key Regulatory Context

Section 25F was enacted as part of the One Big Beautiful Bill Act and is effective January 1, 2027. (Same program as the Education Freedom Tax Credit / Federal Scholarship Tax Credit / ECCA — see [Education Freedom Tax Credit Explained](https://sgoguide.com/resources/education-freedom-tax-credit).) The IRS has not yet issued final regulations. Key statutory requirements:

- SGOs must be 501(c)(3) organizations with primary SGO mission
- Operating states must elect to participate (IRS advance election) and submit a list of qualifying SGOs
- Scholarships must be distributed to 10+ students at multiple schools
- No donor earmarking is permitted
- Donor credit cap: $1,700/year ($3,400 for married filing jointly)
- Student income eligibility: household income at or below 300% of area median gross income
- Qualified expenses track Coverdell Education Savings Account definitions (IRC §530(b)(4))

## Learning Resources

SGO Guide publishes a free five-module course called SGO Fundamentals covering:
1. What SGOs Are and How They Work
2. The Law Behind Section 25F
3. How to Form an SGO
4. Running a Compliant SGO
5. The Evolving Regulatory Landscape

The course is available at [sgoguide.com/learn](https://sgoguide.com/learn).

## Blog

SGO Guide publishes analysis, regulatory updates, and operational guidance at [sgoguide.com/blog](https://sgoguide.com/blog) — covering topics including proposed IRS rules, state opt-in developments, compliance strategy, and formation decisions.

### Key Articles

- [Qualified Contributions vs. Operating Gifts: The Two-Gift Structure That Funds an SGO](https://sgoguide.com/blog/sgo-qualified-contributions-vs-operating-gifts): The answer to the sentence every SGO business plan stalls on — who pays for the staff. The 10% operating allowance is not the only money available; it is only the money that comes out of the segregated accounts. Sets the two instruments side by side: a Section 25F qualified contribution (dollar-for-dollar federal credit up to $1,700 per taxpayer, cash only, lands in the state segregated account, IS the denominator of the 90/10 test) versus an ordinary Section 170 operating gift (deduction if the donor itemizes, any asset including appreciated securities and donor-advised fund grants, lands in general operating funds, never enters the denominator). Because the June 2026 safe harbor measures income by what the segregated account holds, operating money does not move the ratio, does not consume the 10%, and does not reduce what reaches students — an SGO raising $200,000 has a $20,000 budget on one instrument and an $80,000 budget on two. Then why overhead belongs outside the accounts (processing fees already claim a quarter of the allowance; the cap binds per state account so thin states cannot carry themselves; year one is spent before the first qualified contribution arrives and start-up relief is unresolved); how to ask one donor for both gifts (lead with the credit because it is free, then make the smaller honest ask, with the non-refundability and itemizing caveats); the receipting and bookkeeping that breaks organizations (two receipt formats — a §25F acknowledgment carrying the unique donor number versus a §170 contemporaneous written acknowledgment, which will not support a credit claim; two ledgers, never commingled; intake that captures donor intent at the moment of the gift; and routing rejected stock and DAF gifts to operating support rather than into the account, where they would pollute the denominator — those being frequently the largest gifts a donor can make). Plus where operating money actually comes from (a parent or affiliated organization, foundation grants for operations, corporate sponsorship, and partner-school fees, which are a use of the 10% rather than a source outside it), and four cautions: "largely scholarship-granting" is still undefined, no quid pro quo in either direction, operating donors can still accrue substantial-contributor and disqualified-person status reaching their own families' eligibility, and everything rests on a preview rather than a regulation. How-To, 13 min read.

- [Can an Existing 501(c)(3) Be Your SGO?](https://sgoguide.com/blog/existing-501c3-as-your-sgo): Section 25F imposes no formation-date test and no purpose clause, so an established charity is legally eligible — but Treasury's June preview measures the 90 percent requirement against total receipts unreduced by expenses, and the segregated-account safe harbor is available only to organizations whose activities are largely scholarship-granting, which is exactly what a multi-program charity cannot claim (worked example: a $4M organization raising $500K must spend $4.05M on scholarships). Then the four things an organization's history carries with it: the private foundation hard stop and the EO Business Master File check states will run, Notice 2025-70's requirement that a state independently determine the organization is required by its own articles or bylaws to satisfy every Section 25F(c)(5) requirement (with the five governing-document provisions that conflict), the substantial-contributor calculation measured from inception and the proposal to drop the $5,000 floor, and restricted funds that do not convert. On registering everywhere: only thirty states have elected as of the IRS list dated July 24, 2026; "located in" means foreign qualification plus charitable registration in roughly forty jurisdictions at real recurring cost; being located in a state still does not put you on its list, and no SGO is federally listed anywhere yet. Plus why footprint follows students rather than donors, the no-cross-subsidy per-account math, the three profiles for which conversion actually works, the dedicated-affiliate structure for everyone else, and the open questions the end-of-September proposed regulations must settle. Strategy, 19 min read.

- [Can a Single School Join an SGO?](https://sgoguide.com/blog/single-school-join-an-sgo): Why one campus is the hardest case in the program — the ten-student, more-than-one-school rule plus the structural-earmarking prohibition mean an SGO cannot exist to fund your students. What joining actually is (vetted and approved, branded giving page and QR code, families apply, committee decides, tuition disbursed against confirmed enrollment); the honest annual job for school staff (promote through zero-cost channels, confirm enrollment, help families with income documentation, reconcile disbursements); the three things a school can never promise (no earmarking, no guaranteed award, no proportional return) versus the preferred-school naming that is permitted and visible to the committee; the economics ($0 to start, a partner fee paid from the operating allowance and never from the 90%, 3% as a benchmark); when joining is the wrong answer; and a fall checklist. How-To, 12 min read.

- [How a Single School Starts Its Own SGO](https://sgoguide.com/blog/single-school-start-its-own-sgo): A single school can form the entity but usually cannot use it as imagined. The governing sentence — ten or more students who do not all attend the same school, read together with the earmarking prohibition — means the composition of the applicant pool determines compliance, not the language on the donation form. Covers the "we'll open it on paper" failure mode and the token-second-school version; the five things a legitimate single-school-founded SGO must build (real outreach beyond your community as a compliance artifact, criteria written for a population, an arm's-length committee, awards that actually land elsewhere, a contemporaneous record for the programmatic audit); the consequence boards must be able to say out loud, that community money will fund other schools' students; the economics on a small base (10% of roughly $200,000 against audit, insurance, software, and payment processing); the substantial-contributor and disqualified-person traps that bind hardest on one campus; the four structures ranked (join, consortium, own-and-outsource, form-and-staff); the formation sequence with four school-specific adjustments; and five questions that settle the decision. Strategy, 14 min read.

- [Will Michigan Opt Into the Education Freedom Tax Credit?](https://sgoguide.com/blog/will-michigan-opt-in-education-freedom-tax-credit): Why Michigan sits in the studying column — no Form 15714 election filed, a governor waiting on federal guidance, and an advisory State Board vote urging non-participation that does not hold the pen. The two live decision points: a lame-duck window before January 1, 2027 (open because the deadline and procedure for a late election are unresolved), and the November 3 gubernatorial race, where a new governor seated in January 2027 arrives after the 2027 marker and would realistically elect for 2028. The Article VIII, Section 2 question — the strictest Blaine provision in the country, reaching indirect tax benefits — and the counterarguments that no state money moves and that an election costs the Michigan treasury nothing because the state income tax begins from federal AGI. The export asymmetry (Michigan donors can claim the credit today through out-of-state SGOs while Michigan students cannot receive), and the nine-to-fifteen-month formation timeline that forces Michigan schools to start before the answer arrives. State News, 13 min read.

- [The Nine Questions the September Education Freedom Tax Credit Regulations Must Answer](https://sgoguide.com/blog/education-freedom-tax-credit-regulations-open-questions): The tracked list of genuinely unresolved Section 25F questions ahead of Treasury's end-of-September 2026 proposed regulations, each with what is established, what is open, and how to build so either answer leaves you compliant — processing fees inside the 10%, shared-expense allocation across state accounts, disqualified-person scope, the ten-student/multi-school test's scope, per-state versus aggregate measurement, startup-cost relief, the substantial-contributor threshold, undesignated gifts, and the meaning of "largely scholarship-granting." Plus the tenth question that belongs to states: the SGO listing procedure that does not yet exist, which is why no SGO is federally listed anywhere. Regulatory Updates, 14 min read.

- [Does Taking Education Freedom Tax Credit Money Put Your School Under Federal Regulation?](https://sgoguide.com/blog/education-freedom-tax-credit-federal-strings-schools): The first question Christian, classical, and independent school boards ask. Follows the money (donor to SGO to family to school as tuition), then the precise finding that every substantive requirement in the enacted statute runs to the SGO and none to schools — and the honest caveat that the autonomy and religious-liberty language from the standalone ECCA bill is not in the codified section. The Grove City College v. Bell precedent that makes indirect aid a real concern, distinguished by Arizona Christian School Tuition Organization v. Winn (tax-credit contributions are not government funds) and Zelman (private choice), with the caveat that no court has tested Section 25F. The four places real exposure sits: documentation burden, state-level listing conditions, future Congresses, and the SGO's own obligations if the SGO is yours. Five questions to take to counsel. Regulatory Updates, 14 min read.

- [The Consortium SGO](https://sgoguide.com/blog/consortium-sgo-independent-christian-schools): How independent Christian, classical, and private schools that compete for the same families should share one scholarship organization — the diocese playbook's structure without a hierarchy to settle disputes. Five decisions: a dedicated affiliate rather than the association itself (the largely-scholarship-granting safe harbor); a board with an independent majority rather than one seat per school; the no-proportional-return conversation to have in writing before money arrives, with blind first-pass review and published distribution reporting; committee independence where no school employee decides its own applicants; and cost sharing funded from dues and operating gifts rather than the 10% allowance. Includes the member MOU checklist, exit terms, and why a consortium beats every school forming its own (the audit is entity-level). Strategy, 13 min read.

- [What It Actually Costs to Run an SGO](https://sgoguide.com/blog/sgo-operating-budget-year-one): A planning model, explicitly using illustrative placeholders rather than measured data. The revenue ceiling (10% per state account, with donor counts at the $1,700 cap for $200K through $5M raised, showing that revenue scales with people enrolled rather than gift size); the work by function with per-contribution, per-applicant, per-cycle, per-award, and annual labor; why year one is structurally broken (costs front-loaded, contributions arriving in Q4, startup relief unresolved); the cost categories and the two pools that can pay for them; the three paths priced (staff it, own and outsource, join); and an eight-question worksheet that produces a defensible board budget. Strategy, 15 min read.

- [State Opt-In Status: 30 States Are In for 2027](https://sgoguide.com/blog/state-opt-in-status-mid-2026): Current state-participation picture, verified against the IRS participating-state list dated July 24, 2026 — the thirty states that have filed an advance election for 2027 (up from twenty-seven in June); why the three states added were exactly the veto-override states (Kentucky HB 1, Kansas SB 361, North Carolina HB 87); why opting in is an IRS Form 15714 election by the governor or a designee rather than a required piece of legislation; the critical distinction that no state has submitted its certified SGO list yet, so no SGO is federally listed anywhere; New York's announced-but-not-filed status; the six declined and twelve no-action states; and why the November 2026 gubernatorial elections matter more than any bill because elections are annual. State News, 9 min read.

- [How to Choose the SGO Your School Joins: Twelve Questions](https://sgoguide.com/blog/how-to-choose-an-sgo-for-your-school): Diligence guide for a school that has decided to join rather than form — twelve questions covering per-state listing status, whether the entity is largely scholarship-granting, committee composition and the written award policy, how a donor's preferred-school designation is actually handled (and the earmarking promise that should end the meeting), pool concentration, which pool the partner fee is paid from, payment rails and processing-fee economics, disbursement channel and timing against the tuition calendar, the work that lands on school staff, income-verification burden on families, brand/data/donor-record ownership, and exit terms. Includes four documents to request, red and green flags, and a two-week selection process. How-To, 14 min read.

- [Starting an SGO: Who Is Actually Going to Run It?](https://sgoguide.com/blog/starting-an-sgo-who-will-run-it): Formation is a project with an end date; operating an SGO is a job with no end date, and it is the half nobody costs out. Separates the two questions organizations ask as one — whose SGO is it, and who does the operating work — then itemizes the real job: cash-only gifts designated to a state and receipted against the $1,700 cap with a unique donor number, income verified against 300% of the applicant's own area median, arm's-length award dockets with conflicts screened, disbursement reconciled per segregated state account, monthly per-state 90/10, annual state reports and an audit. Three reasons it is harder than it looks (continuous not seasonal; a role with no veterans before 2027; failure that is quiet until an examination). Then the three ways to get it done — own and run it, own it and outsource the operation to ClearPath Managed, or join an SGO that already runs — with the scale arithmetic (a 10% allowance on $2M funds an internal team; on $200K it does not fund one full-time person) and the hard boundary that a service provider never votes on an award. Closes with four questions in order: 1 and 2 decide whether the SGO should be yours, 3 and 4 decide who runs it. Strategy, 14 min read.
- [Three Ways In: Start Your Own SGO, Have Us Run It, or Join One](https://sgoguide.com/blog/two-ways-in-start-an-sgo-or-join-as-a-partner-school): The fork every organization hits, and why it is really two questions — whose SGO is it, and who does the operating work. What starting your own buys (award criteria, donor ownership, the administrative share as revenue) and costs (months, real governance, a permanent compliance function); the middle path of owning the SGO and having it operated for you, where only the desk work moves and the award decisions never can; what joining as a partner school buys ($0 and days to live, no compliance surface, a 3% fee for enrollment confirmation, your brand on the page) and costs (the SGO's committee decides every award; preference can never bind). The three questions that settle it — the first two decide whether the SGO should be yours, the third decides who runs it — the join-first-form-later sequence, and the cash-only/individuals-only rails note. Strategy, 13 min read.

- [How Much Scholarship Money Could the Federal Credit Unlock in Your State?](https://sgoguide.com/blog/how-much-scholarship-money-federal-credit-your-state): The market math of the uncapped federal credit — filers × participation rate × $1,700 — with worked per-state examples (each 1% of a state's filers at the cap ≈ filers × $17/year), participation-rate benchmarks from mature state programs, and the export math for holdout states whose taxpayers can claim the credit while their students cannot receive scholarships. Strategy, 11 min read.

- [The Diocese Playbook](https://sgoguide.com/blog/diocese-sgo-playbook): How a Catholic diocese or statewide conference should structure an SGO — the separate largely-scholarship-granting affiliate entity, statewide-vs-diocesan scope (one entity with diocesan-branded campaigns), why gifts cannot pass through the offertory or be allocated back to parishes, participation-scale fundraising math, coexistence with existing diocesan tuition aid, and the fall 2026 formation timeline. Strategy, 13 min read.

- [Already Running a State Tax-Credit Scholarship Program? What the Federal Credit Changes for You](https://sgoguide.com/blog/state-scholarship-programs-meet-federal-credit): For existing state-program operators (SSOs, STOs, state SGOs, EITC scholarship organizations): the federal credit is a parallel program, not an upgrade — separate state listing with no grandfathering, the 100%/uncapped/individuals-only/cash-only differences, donor routing (first $1,700 federal, corporate and over-cap dollars state), and the compliance deltas (300% AMI vs FPL, Coverdell expenses, priority rules, the programmatic audit). Strategy, 12 min read.

- [Treasury's June 2026 Section 25F Preview: Every Item, Explained](https://sgoguide.com/blog/treasury-june-2026-section-25f-preview): Item-by-item walkthrough of Treasury's June 9, 2026 guidance preview — the 90% safe harbor, multistate account rules, the entity-level audit and small-SGO alternative, school definitions (homeschool/tribal), income verification menu, the unique donor number, duplicate-award prevention, and the open questions the September proposed regulations must answer. Regulatory Updates, 15 min read.

- [The Section 25F Safe Harbor](https://sgoguide.com/blog/section-25f-safe-harbor-90-percent-test): How the previewed safe harbor measures the 90% test on the segregated account instead of total receipts, why the earlier Notice 2025-70 reading nearly excluded diversified nonprofits, the undefined "largely scholarship-granting" condition, and why the structure favors a separate scholarship-granting entity. Regulatory Updates, 11 min read.

- [How Multistate SGOs Actually Work](https://sgoguide.com/blog/multistate-sgo-one-entity-state-accounts): One 501(c)(3) can be listed by many states, but there is no national pool — donors designate a state, each dollar is locked to that state's segregated account, the 90/10 test runs per account with no cross-subsidy, and the audit stays entity-level. Includes the donor-side asymmetry (donors need not live in a participating state) and thin-state viability math. Regulatory Updates, 12 min read.

- [Selection Committees and Disqualified Persons](https://sgoguide.com/blog/sgo-selection-committee-disqualified-persons): Committee members and their immediate families are expected to be disqualified from receiving scholarships from that SGO; whether that runs organization-wide or per-state is unresolved. Covers the one-committee/many-dockets design, ministerial screening vs deciding, blind review as audit evidence, and the 2% substantial-contributor trap. Regulatory Updates, 12 min read.

- [You Don't Have to Live in a Participating State to Claim the $1,700 Credit](https://sgoguide.com/blog/sgo-donor-state-asymmetry): Donor eligibility for the federal scholarship tax credit turns on where the SGO is listed and where the student resides — not where the donor lives. Cross-state giving from holdout states, the state-credit interplay, the honest bridge framing, and state-conditional pledges. How-To, 9 min read.

- [The 90/10 Rule Is a Withdrawal Cap, Not an Expense Rule](https://sgoguide.com/blog/sgo-90-10-withdrawal-cap-not-expense-rule): The test governs what leaves each state account (up to 10% releasable, pooled and fungible afterward), the per-account cap with worked examples, the 10:1 fundraising hurdle that makes paid acquisition effectively unfundable from scholarship money, and the operating-gift escape hatch. How-To, 11 min read.

- [Do Credit Card Fees Count Against the SGO 10%?](https://sgoguide.com/blog/sgo-credit-card-fees-10-percent): Under the general rule, processing fees compete inside the 10% admin allowance — roughly a quarter of it at scale on card rails. Why the $1,700 cap makes the program small-gift-structured, the unresolved safe-harbor netting question, and the ACH-first / donor-covered-fee / pass-through-at-cost playbook. How-To, 9 min read.

- [Scholarship Disbursement Compliance Guide](https://sgoguide.com/blog/scholarship-disbursement-compliance-guide): Why most SGOs get disbursement wrong and what a compliant system looks like. Covers the three disbursement channels (direct-to-school ACH, restricted prepaid card, reimbursement with receipt verification), the receipt collection failure mode, how scholarship use policy connects to disbursement design, and audit trail requirements. How-To, 14 min read.

- [Section 25F Proposed Rules](https://sgoguide.com/blog/section-25f-proposed-rules-what-sgos-need-to-know): What the statute requires, where regulatory gaps exist, and what SGOs should be doing now before final rules are issued. Regulatory Updates, 12 min read.

- [Form Your Own SGO or Partner With an Existing One](https://sgoguide.com/blog/form-your-own-sgo-or-partner-with-existing): Framework for the form-vs-partner decision — when each option makes sense and the questions to work through before deciding. Strategy, 10 min read.

- [The 90/10 Rule](https://sgoguide.com/blog/understanding-the-90-10-rule): How to maintain compliance with the requirement that 90% of annual revenues go to qualified scholarships. Covers start-up cost traps, what counts as overhead, and building real-time monitoring. Regulatory Updates, 11 min read.

- [Compliant Scholarship Award Process](https://sgoguide.com/blog/compliant-scholarship-award-process): How to structure an arm's-length award committee, the no-earmarking rule in practice, and what documentation a compliant award cycle requires. How-To, 14 min read.

- [SGO Income Eligibility: The 300% AMI Requirement](https://sgoguide.com/blog/sgo-income-eligibility-300-percent-ami): How area median income varies by geography, what documentation to collect, and how to handle difficult verification cases. How-To, 11 min read.

- [Qualified Expenses Guide](https://sgoguide.com/blog/section-25f-qualified-expenses-guide): What Section 25F scholarships can and cannot pay for under the Coverdell expense framework — including the gray areas. Regulatory Updates, 10 min read.

- [SGO Compliance Calendar](https://sgoguide.com/blog/sgo-compliance-calendar): What an operating SGO must do in real time, monthly, quarterly, and annually to stay compliant. How-To, 13 min read.

- [Faith Communities and Section 25F](https://sgoguide.com/blog/faith-communities-section-25f-compliance): The four compliance tensions specific to religious organizations — earmarking expectations, single-school concentration, faith-integrated curriculum expense questions, and governance independence in close communities. Strategy, 13 min read.

## Plain-Language Guides by Audience

Short, jargon-free walkthroughs of what actually happens, written for people who will not read a product page:

- [I'm a Donor](https://sgoguide.com/for-donors): The simplest explanation on the site — give up to $1,700 to a scholarship fund and the whole amount comes off your federal tax bill, so the gift costs you nothing. A diagram traces the money (you give → it joins the pool → families apply → the school gets paid → the credit comes back to you at tax time); a chart contrasts a deduction ($374 back on $1,700 in the 22% bracket) with the credit ($1,700 back); a four-row table shows what a $1,700 gift does to four different tax situations (you owe $2,000 when you file → you owe $300; you are already due a $600 refund → you get $2,300 back; your whole tax bill is $900 → you owe $0 and the other $800 carries forward; you owed no federal tax → nothing changes yet and all $1,700 carries forward, up to five years). Also why these funds exist at all — the law requires an approved nonprofit middleman, scholarships bring the cost of school down, and designated money stays in the donor's own state — plus the six rules — the $1,700 / $3,400 caps, non-refundable but carried forward up to five years, cash only, preferred school but never an earmark, the 90/10 split, and the 300%-of-area-median-income eligibility line — and the framing that a donor is voting with their tax dollars.
- [I'm Applying for a Scholarship](https://sgoguide.com/for-families): Five illustrated steps for a parent or guardian, three of which the family owns — find the SGO serving your state, complete one free application per student in English or Spanish, and confirm income (payroll verification or documents; no SSN stored); then the school confirms enrollment, the committee decides at arm's length with returning-student priority, and funds are paid to the school or vendor rather than to the family. Includes a dated worked example (Saturday application → same-sitting income check → school confirms Tuesday → committee decides three weeks later → tuition paid before August) and the three rules that never change: applying is free, the money never touches a family's bank account, and no donor can pick a child.
- [I'm a School](https://sgoguide.com/for-schools): Framed as a three-way win — the school gets tuition paid directly plus a 3% fee for the enrollment checks only it can do, the donor is net $0 because up to $1,700 ($3,400 jointly) comes back off their federal tax bill, and the student's family pays less for the school they already chose; the only real catch is that a donor must owe at least as much federal tax as the credit they claim. Five illustrated steps for a school leader, only two of which the school owns — apply and get approved as a partner school, receive a branded page/QR/portal plus the marketing toolkit, let the community give, confirm enrollment in one click, and let the SGO award, pay tuition, and settle the fee. The marketing toolkit is included at no extra cost: a school-owned contact list with spreadsheet roster import, trackable links and QR codes per placement, outreach emails drafted one at a time in the school's voice and approved before sending, a content studio for social posts, newsletter items, letters home, bulletin inserts, call scripts and printables, and analytics on sources, outreach performance and goal pacing. Includes a dated worked example (join form Day 1 → approved Day 3 → posters and drafted letter home in Week 1 → giving through Weeks 2–8 → one-click enrollment confirmations → tuition and the 3% fee at award season), the $0 start, the 3% partner fee, and what a school can and cannot see about a family.
- [A Single School](https://sgoguide.com/single-school): Why one campus should join an SGO rather than form one. Section 25F requires an SGO to award scholarships to students at ten or more schools and prohibits earmarking, so an SGO formed to fund a single school's own families cannot legally prioritize them. Lays out the four structural blockers, the six benefits of joining ($0 start, days to live, branded page and QR, 3% partner fee, advisory preferred-school pool, one-click enrollment confirmation), and the four cases where forming your own — self-run or under ClearPath Managed — is still the right call.

## Reference Tools

- [Education Freedom Tax Credit Explained](https://sgoguide.com/resources/education-freedom-tax-credit): The program's four names (EFTC, FSTC, ECCA, Section 25F), where each comes from, what the credit is worth, and key dates.
- [SGO Glossary](https://sgoguide.com/resources/sgo-glossary): Plain-language definitions of 29 key Section 25F terms — SGO, the 90/10 rule, the safe harbor, segregated state accounts, disqualified persons, no-earmarking, arm's-length award process, 300% AMI, qualified expenses, state opt-in, disbursement channels, and more. Each term has a stable anchor link (e.g. /resources/sgo-glossary#90-10-rule) and is free to quote with attribution.
- [State Opt-In Tracker](https://sgoguide.com/resources/state-tracker): Interactive 50-state map and table of Section 25F opt-in status (Opted In, Legislation Pending, Studying, Declined, No Action) with per-state notes. Free to cite, embed (iframe at /resources/state-tracker/embed), or download.
- [State Guides](https://sgoguide.com/states): A dedicated page for each of the 50 states (e.g. [Texas](https://sgoguide.com/states/texas), [Indiana](https://sgoguide.com/states/indiana)) covering that state's current status, what it means for donors, families, and SGO founders, SGOs operating there, and state-specific FAQs.
- [Donor Tax Credit Calculator](https://sgoguide.com/resources/donor-tax-credit-calculator): Estimates the federal credit value of a Section 25F contribution.
- [SGO Scholarship Eligibility Checker](https://sgoguide.com/resources/scholarship-eligibility): Household income limits for tax-credit scholarships, for every U.S. county and every separately-published New England town. Section 25F sets student eligibility at 300% of the AREA median gross income, adjusted for household size — not a national figure — so the ceiling for a household of four ranges from roughly $79,000 to over $600,000 depending on where the family lives. Interactive county map plus an address check. The full dataset is free to cite and downloadable as JSON at [/api/data/income-limits](https://sgoguide.com/api/data/income-limits) (derived from HUD published area median family incomes; includes the derivation method).
- [Eligibility Checker](https://sgoguide.com/resources/eligibility-checker): Five-question assessment of an organization's readiness to form an SGO.
- [SGO Directory](https://sgoguide.com/find): The public directory of state-approved Section 25F SGOs. No SGOs are federally approved yet — the program takes effect January 1, 2027 — so the directory currently explains the approval timeline and will list organizations as states complete approvals.

## Machine-Readable Data

- [Full content file](https://sgoguide.com/llms-full.txt): The complete text of SGO Guide's reference content — both explainers, the full glossary, the 50-state opt-in dataset, and every blog post — in one markdown document with canonical URLs.
- **Markdown mirrors**: Every blog post is available as raw markdown by appending `.md` to its URL (e.g. [/blog/understanding-the-90-10-rule.md](https://sgoguide.com/blog/understanding-the-90-10-rule.md)).
- [State tracker JSON API](https://sgoguide.com/api/data/state-tracker): The full 50-state opt-in dataset — status, notes, and review dates — as JSON with CORS enabled. Free to republish with attribution and a link to [the State Opt-In Tracker](https://sgoguide.com/resources/state-tracker).
- [Income limits JSON API](https://sgoguide.com/api/data/income-limits): The 300% of area median gross income eligibility ceilings behind the scholarship eligibility checker — one entry per HUD income-limit area (every U.S. county, plus the towns the six New England states publish separately), as JSON with CORS enabled. Carries the HUD source year, the household-size and multiplier recipe (24 CFR 5.603) so any cell can be reproduced, and a worked example. Free to republish with attribution and a link to [the eligibility checker](https://sgoguide.com/resources/scholarship-eligibility).
- [Blog RSS feed](https://sgoguide.com/feed.xml): All blog posts with full content (content:encoded), titles, dates, and categories.
- [Sitemap](https://sgoguide.com/sitemap.xml)

## Who's Behind SGO Guide

SGO Guide was co-founded by Taylor Hess and Robert Hoehn-Saric ([about the founders](https://sgoguide.com/about)). Taylor is a technologist with 15+ years building software products, most recently an engineer at Meta working to protect children and teens from the harms of social media; he builds the ClearPath platform as his full-time focus. Robert has spent his entire career in education — private school formation, education advisory, and software products for secondary and higher education. At [Sterling Partners](https://sterlingpartners.com/), the Chicago-based investment firm with a decades-long history in education, he has worked with many of the firm's education portfolio companies, with particular depth in how secondary education is funded. The founding team is supported by a network of Section 25F-focused legal and tax counsel, compliance advisors, and education operators.

## Contact

Organizations interested in forming or operating an SGO can schedule a consultation at [sgoguide.com/contact](https://sgoguide.com/contact).

## Faith-Based Organizations

SGO Guide has dedicated guidance for faith communities forming Section 25F SGOs:

[Christian Schools & Churches](https://sgoguide.com/christian-schools): Covers the three common structures for Christian organizations (dioceses/school networks, single church + school, evangelical enrichment nonprofits) and the four compliance challenges specific to faith communities: parish earmarking expectations, single-school concentration, faith-integrated curriculum and qualified expenses, and governance independence in close communities.

[Faith-Based Organizations (all traditions)](https://sgoguide.com/faith-based-sgo): Covers how Section 25F applies across Christian schools, Jewish day schools, Islamic schools, and interfaith nonprofits — including the shared compliance challenges and tradition-specific considerations.

## Use Cases

SGO Guide documents eleven SGO use cases at [sgoguide.com/use-cases](https://sgoguide.com/use-cases) in two groups:

**Who you are:** [Diocese & School Networks](https://sgoguide.com/use-cases#diocese), [Independent Faith-Based Organizations](https://sgoguide.com/use-cases#faith-org), [Private School Consortiums](https://sgoguide.com/use-cases#consortium), [Community Organizations](https://sgoguide.com/use-cases#community), [Public School–Adjacent Nonprofits](https://sgoguide.com/use-cases#public-school).

**How you'll operate:** [Single-State SGO](https://sgoguide.com/use-cases#single-state), [Multi-State SGO — one entity with a segregated account per state](https://sgoguide.com/use-cases#multi-state), [One National Scholarship Committee over per-state dockets](https://sgoguide.com/use-cases#national-committee), [Central Office with Committees in Each State](https://sgoguide.com/use-cases#state-committees), [Hybrid National Deciders with Local Ministerial Screeners](https://sgoguide.com/use-cases#hybrid-screeners), [Existing State-Program Operators Adding the Federal Credit](https://sgoguide.com/use-cases#state-program-operator).

## URLs

- [Homepage](https://sgoguide.com)
- [What we do](https://sgoguide.com/products): the five offers
- [ClearPath Launch](https://sgoguide.com/products/launch): start your own SGO
- [ClearPath Advisory](https://sgoguide.com/products/advisory): free consultation
- [ClearPath Pledge](https://sgoguide.com/products/pledge): pre-launch pledge drives
- [ClearPath Managed](https://sgoguide.com/products/managed): your SGO, our back office — open today
- [ClearPath Partner Schools](https://sgoguide.com/products/partner-schools): join an SGO we operate — $0 to start
- [ClearPath Advance](https://sgoguide.com/products/advance): school fundraising & marketing suite
- [ClearPath Advance pricing](https://sgoguide.com/products/advance/pricing)
- [ClearPath Advance materials library](https://sgoguide.com/products/advance/templates)
- [ClearPath Advance for SGOs](https://sgoguide.com/products/advance/for-sgos): network operator tools
- [How to Start an SGO](https://sgoguide.com/how-to-start-an-sgo): the five formation stages, real timelines, what it costs
- [SGO Software](https://sgoguide.com/sgo-software): what SGO software has to do under §25F, as a buyer's checklist
- [Start or Join an SGO](https://sgoguide.com/start-or-join-an-sgo): run your own, have us run yours, or join one we operate
- [Platform Tour](https://sgoguide.com/tour)
- [Trust & Audit-Readiness](https://sgoguide.com/trust)
- [Learning Series](https://sgoguide.com/learn)
- [Blog](https://sgoguide.com/blog)
- [Blog RSS](https://sgoguide.com/feed.xml)
- [SGO Finder](https://sgoguide.com/find)
- [Resources](https://sgoguide.com/resources)
- [What Is an SGO?](https://sgoguide.com/resources/what-is-an-sgo)
- [OBBBA / Section 25F Explained](https://sgoguide.com/resources/obbba-explained)
- [Education Freedom Tax Credit Explained](https://sgoguide.com/resources/education-freedom-tax-credit)
- [SGO Glossary](https://sgoguide.com/resources/sgo-glossary)
- [State Opt-In Tracker](https://sgoguide.com/resources/state-tracker)
- [State Tracker JSON](https://sgoguide.com/api/data/state-tracker)
- [Income Limits JSON](https://sgoguide.com/api/data/income-limits)
- [Donor Tax Credit Calculator](https://sgoguide.com/resources/donor-tax-credit-calculator)
- [Eligibility Checker](https://sgoguide.com/resources/eligibility-checker)
- [State Guides](https://sgoguide.com/states): all 50 states
- [How It Works](https://sgoguide.com/how-it-works)
- [About / Founders](https://sgoguide.com/about)
- [Use Cases](https://sgoguide.com/use-cases)
- [I'm a Donor](https://sgoguide.com/for-donors): plain-language guide
- [Donor list](https://sgoguide.com/donor-list): reminder before the giving deadline, by email or text
- [I'm Applying for a Scholarship](https://sgoguide.com/for-families): plain-language guide
- [I'm a School](https://sgoguide.com/for-schools): plain-language guide
- [A Single School](https://sgoguide.com/single-school): join our SGO instead of forming one
- [Christian Schools & Churches](https://sgoguide.com/christian-schools)
- [Faith-Based Organizations](https://sgoguide.com/faith-based-sgo)
- [Contact](https://sgoguide.com/contact)
- [Sitemap](https://sgoguide.com/sitemap.xml)