SGO Fundraising With the Federal Scholarship Tax Credit: A 2027 Playbook

The pitch in one sentence

"Give up to $1,700 to our scholarship fund and take up to $1,700 off your federal taxes." That's the core of every federal-credit campaign. It's a dollar-for-dollar credit, not a deduction, which makes it far more valuable than a normal charitable gift for most donors. Our tax credit vs. deduction page explains the difference for donors who ask.

The facts behind it, under the statute and Treasury's proposed rules:

• Up to $1,700 per taxpayer per year; married couples filing jointly can claim up to $3,400 if each spouse gives up to $1,700.
• The credit is nonrefundable: it can't exceed the donor's federal income tax. Unused credit carries forward up to five years.
• A gift that earns the credit can't also be deducted as a charitable contribution.
• If the donor gets a state tax credit for the same gift, the federal credit is reduced by that amount.
• Only individuals qualify, not businesses.
• Gifts count from January 1, 2027, to SGOs on an opted-in state's list.

Worked examples for your donor materials

Donors who give more than $1,700 still get at most $1,700 in credit; how the rest is treated depends on how it was designated, so they should ask a tax professional. Always add: "Not tax advice; ask your tax professional." Point donors to the scholarship tax credit calculator and how to claim the credit.

Who to ask first

Treasury projects more than 11 million taxpayers giving nearly $26 billion a year by 2030. Your best early donors:

1. Your current donors. Many already give more than $1,700 a year; show them how to designate part of it for the credit.
2. Grandparents and extended family of the students you serve, who want to support education generally.
3. Alumni of partner schools and their families.
4. Employees through after-tax payroll deduction, if an employer will run a giving program.
5. Out-of-state donors. A donor in a state that didn't opt in can still give to your SGO and claim the credit.
6. Donors who already give to state tax-credit programs, who understand the model but need to know how the two credits interact.

A 2027 fundraising calendar

Compliance rules that shape your campaigns

• Designation at the time of the gift. Your form must let the donor designate the gift as a qualified contribution; the designation can't be revoked later.
• No earmarking. You can't promise a donor that their gift will fund a particular student.
• Disqualified persons. You can't award scholarships to substantial contributors, officers, directors, trustees, people who select recipients, or their families.
• Goods and services reduce the credit. Avoid perks on federal-credit gifts.
• State solicitation registration. Register in each state where you actively solicit.
• The 90% rule. Scholarships must be at least 90% of measured income, so fund overhead from other sources too.
• Don't overpromise. Say "may reduce your federal taxes" and "subject to Treasury's final rules," not "guaranteed."

Donor receipts done right

The temporary regulations require a written acknowledgment by January 31 with:

• Your EIN
• The donor's total designated qualified contributions for the year
• The donor's unique donor number, generated with the IRS format
• Whether you provided goods or services, with a description and good-faith value

Electronic delivery is allowed if the donor consents. Donors need the unique donor number on their return; a missing number can cost them the credit, so build it into your gift processing from day one.

Messaging dos and don'ts

Do: lead with students and outcomes; explain the credit in plain numbers; show a simple three-step "give, get your receipt, claim on your return"; be clear the program needs the state's participation.

Don't: call it "free money"; imply your SGO is government-run; promise a specific tax result; use the word "voucher" for a donor-funded scholarship.

Use Edulist to meet donors

Edulist's donor pages explain the federal credit to taxpayers and record pledges: the amount, a chosen SGO or a request for a suggestion, and consent to be introduced. Pledges and introductions appear in your SGO dashboard so you can send giving instructions. Edulist never touches the money. Register your SGO to start receiving pledges before January 1, 2027.