Helping Your Members Access a New Federal K-12 Scholarship Program
Your Mission and Our Mission in Partnership
You support your members. We raise scholarship funds and award K-12 scholarships. Together, we can help make scholarships available to the families you serve, at no cost to your organization or your members.
How the Program Works
Congress recently enacted a federal tax credit program that will make billions of dollars available to support K-12 education nationwide. Members and supporters of your organization can redirect up to $1,700 of their federal taxes each year to fund K-12 scholarships.
Importantly, donors may earmark their contributions for scholarships awarded specifically to members of your organization, helping ensure that the families you serve benefit directly from the program.
Donors may earmark contributions to support scholarships for students from member families. These funds are used to support eligible students.
Federal law requires that at least 90% of all funds raised through the program be awarded as scholarships, with no more than 10% used for fundraising, administration and compliance.
Why Membership Organizations Participate
Participation in the scholarship program allows membership organizations to help member families access educational opportunities while strengthening the services they offer their members. Key benefits include:
- Direct benefits for your members: Donations can be earmarked specifically for scholarships awarded to members of your organization.
- No administrative burden: The K-12 Scholarship Foundation handles all fundraising administration, scholarship processing, payments, and compliance requirements
- No financial cost: Participation does not require financial contributions from your organization or your members.
- Transparency and accountability: Through the Foundation’s online platform, your organization can track donations, scholarship applications, and scholarship payments.
- Stronger member benefit: The scholarship program allows your organization to offer a meaningful educational benefit to the families you serve.
Your Organization's Role
Your organization plays an important role in connecting your members with the scholarship program. In particular, participating organizations may:
- Inform members about the scholarship program and how they can participate.
- Encourage members and supporters to earmark their donations to benefit members of your organization.
- Submit scholarship applications and make scholarship recommendations on behalf of your members.
Our Role
The K-12 Scholarship Foundation administers all operational, administrative, and compliance aspects of the program. In particular, the Foundation will:
- Prepare information materials customized for your members.
- Process and track all donations.
- Issue donors the receipts required for tax purposes
- Earmark and safeguard scholarship funds.
- Receive and process scholarship applications.
- Pay scholarships directly to schools and approved service providers.
- Ensure full compliance with all federal and state laws and regulations.
All final scholarship decisions are made by the Foundation in accordance with applicable law and its charitable mission.
Step-by-Step Program Process
The following steps illustrate how the program operates in practice:
- The K-12 Scholarship Foundation provides customized information materials and an online platform that allows donors to participate easily and earmark donations to benefit your membership organization.
- Your organization shares this information with members and encourages their participation and earmarking of donations.
- The Foundation receives donations, issues the required tax receipts, safeguards the funds, and provides full transparency throughout the process.
- Your organization submits scholarship recommendations through the online platform on behalf of your members.
- The Foundation verifies student eligibility, confirms acceptance to the school or program of choice, obtains payment information, and ensures compliance with all federal and state program requirements.
- Scholarships are paid directly to schools or authorized service providers. Neither your organization nor your members are required to handle funds or payments.
- Through the Foundation's online platform, your organization can monitor the number of participating members, funds raised, scholarship applications submitted, and scholarships awarded.
Legal and Compliance Considerations
Before the program begins in January 2027, a legally binding cooperation agreement will ensure that:
- Your member information and donor lists will not be shared with third parties.
- The Foundation’s online platform will implement appropriate data security safeguards to protect member information and the personal and financial information of donors and member families.
- All donations and scholarships are processed in full compliance with IRS requirements.
- The K-12 Scholarship Foundation assumes full responsibility for compliance with all applicable federal and state regulations.
- Your organization can monitor participation, funds raised, applications submitted, and scholarships awarded on the Foundation's online platform.
Interested in Learning More?
Frequently Asked Questions
How does K-12 Scholarship Foundation fit into this process?
K-12 Scholarship Foundation serves as the scholarship granting organization and program administrator. We educate schools, coordinate participation, ensure compliance with federal and state regulations, and oversee how funds are allocated as scholarships to support participating schools and their students.
How can it be that there is no cost to the school or staff who participate?
Staff contributions qualify for a full federal tax credit in participating states. Because the contribution is offset by the tax credit, participation does not create a net financial cost, and there is no cost to the school to implement the program.
How are the contributions offset so staff do not face a financial burden?
Participation is facilitated through payroll and managed by a third party financial processor. Tax withholdings are adjusted to account for the federal tax credit, allowing contributions to be made in a structured and manageable way.
Are our staff’s contributions used to support scholarships at our school?
Yes. K-12 Scholarship Foundation allocates scholarship funding in a way that prioritizes the participating school community, so funds generated through your school are used to support scholarships that benefit your students.
How does the Education Freedom Tax Credit work?
The Education Freedom Tax Credit allows individuals to contribute to qualified scholarship granting organizations and receive a federal tax credit for their contribution. These funds are then used to provide scholarships for eligible students.
Who decides how scholarship funds are awarded?
K-12 Scholarship Foundation oversees the scholarship process and allocates funds in accordance with program guidelines, with the goal of supporting participating school communities while maintaining full compliance with all regulations.
How do I know if my state is participating?
The program is available in states that choose to participate. We can help you determine your state’s status and guide your school through the next steps if the program is available in your state.
Why should I take action now if the tax credit does not begin until 2027?
The period before 2027 is the preparation phase. Schools that engage early can educate their staff, complete onboarding, and ensure they are positioned to participate as soon as the program begins. Early participation also helps ensure your school is included in the initial rollout, allowing scholarship funding generated through your community to be directed to your students rather than going unused or benefiting other institutions.