Questions about running an SGO on software.
The Education Freedom Tax Credit is new, and most SGOs forming for it are doing this for the first time. Here are the questions we hear most.
What is SGO Software?
SGO Software is one platform that runs a Scholarship Granting Organization end to end: donor collection with per-donor §25F receipts, family applications with needs-based eligibility, school disbursement, and the admin and reporting back office. It bundles what would otherwise be four separate software products, with federal compliance built in.
What is a Scholarship Granting Organization (SGO)?
An SGO is a 501(c)(3) nonprofit that receives tax-credit-eligible donations and awards K-12 scholarships to eligible families, then disburses those funds to the schools the students attend. SGOs are also called STOs, SSOs, or SFOs depending on the state.
What is the Education Freedom Tax Credit (§25F)?
The Education Freedom Tax Credit (EFTC) is a federal tax credit for donations to Scholarship Granting Organizations, enacted as 26 U.S.C. §25F (OBBBA Section 70411) and effective January 1, 2027. SGO Software is built around its requirements.
Do I really need software to run an SGO?
Running an SGO means collecting donor money, issuing tax receipts, verifying family income, awarding scholarships, disbursing to schools, and reporting to state and federal authorities. Doing that on forms and spreadsheets is slow and hard to keep compliant. Purpose-built software lets a small or forming SGO operate, and stay audit-ready, without building four systems.
Can it collect donations and issue tax receipts?
Yes. The donor surface accepts ACH, credit card, PayPal, and payroll deduction, supports one-time and recurring giving, and generates the per-donor §25F receipt each donor needs to claim the federal credit, automatically, as the gift settles.
How does it determine family eligibility?
Families upload income and residency documents, which are reviewed with AI assistance. The platform runs an Area Median Income lookup and the 300%-of-poverty calculation on the verified figures to produce a preliminary eligibility and award estimate, with a recorded trail behind each decision.
What is the 90/10 rule, and does the software track it?
The 90/10 rule requires that at least 90% of donations go to scholarships, leaving no more than 10% for administration. SGO Software tracks every dollar against the cap from day one, so compliance is continuous rather than reconstructed at audit time.
Does it produce state and federal reports?
Yes. Because donors, families, and schools all post to one ledger, the platform generates both state-specific reports and federal §25F reports from the same underlying records, so the numbers reconcile.
We're a brand-new SGO with no software. Is this for us?
Yes, forming SGOs preparing for the 2027 launch are exactly who the platform is built for. It is easier to start on the platform than to migrate onto it after standing up a patchwork of tools.
When should we get started before the 2027 launch?
As early as possible. Pre-registration lets you capture donors and applicants before the program opens, and building on the platform from the start avoids a later migration. The credit is effective January 1, 2027.
How is SGO Software priced?
Pricing is scoped to your program, the states you operate in, your donor and applicant volume, and the surfaces you use. Contact us for a quote.
Preparing your SGO for January 2027?
See the platform that runs donor collection, family applications, school disbursement, and §25F reporting end to end. Talk to us early.