For Nonprofits and Foundations
Consider SGO Formation or Sponsorship
An existing 501(c)(3) organization that is not a private foundation may be able to operate as a Scholarship Granting Organization if it satisfies the applicable federal requirements and appears on a participating state's SGO list. PSC helps nonprofits and foundations evaluate readiness and build the operating infrastructure a program needs.
The Education Freedom Tax Credit creates the opportunity. Scholarship Granting Organizations administer the scholarships. PSC provides the infrastructure that helps those organizations operate.
Federal Requirements
What a Qualifying SGO Must Satisfy
- Be described in Section 501(c)(3)
- Be exempt from federal income tax
- Not be a private foundation
- Appear on a participating state's SGO list
- Maintain separate accounts for qualified contributions
- Prevent commingling with other funds
- Spend at least 90% of its income on scholarships for eligible students
- Provide scholarships to at least 10 students who do not all attend the same school
- Use scholarship funds only for qualified K–12 education expenses
- Verify household income and family size
- Give required priority to renewal applicants and qualifying siblings
- Avoid earmarking contributions for a particular student
- Avoid awards to disqualified persons
- Maintain required records and reporting
Ways to Participate
Formation, Sponsorship, or Collaboration
Form a New SGO
Launch a dedicated Scholarship Granting Organization with PSC's operational, compliance, and technology infrastructure.
Sponsor an Existing Program
Provide funding, community reach, or organizational support to a participating SGO operating in your state.
Explore Readiness
Complete a preliminary readiness assessment to understand what launching a program would involve for your organization.
What to Expect
Typical Steps for Nonprofit Partners
- Confirm your organization's 501(c)(3) and private-foundation status
- Complete a preliminary readiness assessment
- Review state participation and SGO-list requirements
- Evaluate operating-model, policy, and financial-control needs
- Determine which administrative services your organization needs
- Plan a launch timeline aligned with state processes
Important Disclosure
PSC's Role
Schools, Providers, CPAs, Associations, and Community Partners
Join the infrastructure helping SGOs connect private contributions with meaningful educational support.