July 10, 2009
Scholarship Granting Orgnizations provide opportunities, options
What is a Scholarship Granting Organization (SGO)? A scholarship granting organization (SGO) is a 501 (c-3) non-profit organization which would be created for the purpose of receiving donations and granting scholarships. An SGO could be established within a county, city or diocese, and must provide scholarships to multiple schools. The SGO would grant scholarships to multiple schools including public and private. The CHOICE Charitable Trust in Indianapolis is the only SGO in Indiana. SGO’s will be created throughout the state to serve low to moderate income families
Who is eligible for a scholarship? Scholarship eligibility is based primarily on a family’s income. Income eligibility is based on 200 percent or twice the income for the federal free and reduced lunch program. For example a family of four could have an annual maximum income level of $78,000. Larger families with higher income levels may also be eligible. A student must be enrolling in kindergarten or enrolled in a public school during the preceding school year to be eligible. If a student has received a scholarship in the previous year from a qualifying SGO they may also be eligible.
Who can get a Scholarship Tax Credit? A donor who gave $5,000 to a participating scholarship program would be able to claim a $2,500 credit against what they owed in state income tax liability. The SGO program received $5,000 in the private donation, which would then be used to fund scholarships for lower-income students. A $2,500 state tax credit helped leverage $5,000 in private scholarship donations.
What’s Next? Glenn Tebbe, along with diocesan education officials, will be meeting with Catholic and other non-public school leaders within their dioceses and begin discussing how to create Scholarship Granting Organizations in their area. The Indiana Department of Revenue and Indiana Department of Education will begin the rule making process to provide specific guidelines for the SGO’s that are created.