Answers to your most-asked questions about our new SGO program
The new Education Freedom Tax Credit (EFTC), also known as the Federal Scholarship Tax Credit program, creates a significant opportunity for donors, families, and Christian schools.
While final details are still developing, the basic idea is simple: individual taxpayers may be able to make a qualifying cash contribution to an approved Scholarship Granting Organization (SGO), receive a federal tax credit, and help fund scholarships for eligible K–12 students.
For Christian schools in Texas, Legacy Deo’s SGO program is preparing to make this opportunity practical, trustworthy, and mission focused. Want to learn more? Here are some answers to the most-asked questions about this new opportunity, based on current guidelines:
What is a Scholarship Granting Organization?
A Scholarship Granting Organization, or SGO, is a nonprofit organization approved to receive qualifying donations and use those funds to provide scholarships for eligible students.
Under the EFTC program, SGOs will receive donations, follow federal and state requirements, review applications, verify eligibility, and award scholarship assistance.
Legacy Deo’s SGO will serve private schools in Texas by helping grow scholarship funds that make Christ-centered education more accessible to families.
What is the Federal Scholarship Tax Credit Program?
The EFTC program allows individual taxpayers to receive a dollar-for-dollar federal tax credit for qualifying cash contributions to approved SGOs, up to the annual limit of $1,700.
In practical terms, a donor may be able to give to an approved SGO and reduce their federal income tax liability by the same amount, dollar for dollar, up to the program limit. The current limit is up to $1,700 per taxpayer per year. That means if your tax liability is $10,000, but you contributed $1,700 to a qualified SGO during that same tax year, your final tax liability would be $8,300.
Please note that donors cannot claim both the Federal Scholarship Tax Credit and a charitable deduction for the same contribution. We encourage everyone to consult a tax advisor for further information.
When does the program begin?
The program is scheduled to begin January 1, 2027. States must choose to participate and provide the IRS with a list of approved SGOs. Texas is slated to participate, and schools, SGOs, donors, and families should watch for additional guidance as details are finalized.
How does a donation become scholarship support?
While details are still coming in, we expect the process to work generally like this:
- An individual taxpayer makes a qualifying cash contribution to an approved SGO, such as Legacy Deo’s SGO.
- The donor may receive a federal tax credit for that gift, subject to the annual limit and other requirements.
- The SGO uses the funds to provide scholarships for eligible K–12 students.
- Families apply for scholarship assistance.
- The SGO, in collaboration with schools, reviews applications, verifies eligibility, and awards scholarships according to program guidelines.
Can donors support a specific school?
According to current guidelines, donors will be able to indicate a school they wish to support through the SGO process. It is important to note, however, that donors cannot earmark a scholarship for a specific student. This guideline allows donors to support Christian education at a participating school while ensuring scholarships serve eligible students and families, not just those whose family or friends contribute to the program.
Can I contribute to Legacy Deo’s SGO if I live in another state?
Yes. One exciting difference between a federal program and many state-based programs is that support isn’t limited to donors who live in the same state as the school.
That means an individual taxpayer from another state (including grandparents, relatives, friends, alumni) may be able to make a qualifying contribution to Legacy Deo’s SGO and receive the federal tax credit, as long as the gift meets federal requirements and Legacy Deo is approved and listed as an SGO for the applicable state and year.
Who can receive a scholarship?
Scholarships are intended for eligible K–12 students. Families will need to apply and provide the information required to verify eligibility, including financial need or income qualifications as defined by federal guidance.
Families interested in scholarship assistance should stay connected with their school and Legacy Deo’s SGO as application timelines and guidelines are released.
How does this program help families?
For many families, Christian education is deeply desired but financially difficult. The EFTC program may help make that choice more accessible.
Some currently enrolled families may receive scholarship support that helps them remain in a Christian school. Other families exploring enrollment may discover that Christian education is more attainable than they thought. For families who don’t receive other forms of school choice assistance, SGO scholarships may provide another path to help make tuition possible.
How does the Federal Scholarship Tax Credit program compare to Texas Education Freedom Accounts?
Texas Education Freedom Accounts (TEFA) and the federal SGO program are two entirely separate opportunities. TEFA are funded by public funds and the federal SGO program scholarships are funded by private charitable giving.
We understand that families may have questions about whether different forms of assistance can be combined. Those details may depend on federal rules, state policy, SGO guidelines, and school-level decisions. Families should contact their school and Legacy Deo’s SGO webpage for the most current guidance as the program develops.
Why is Legacy Deo involved?
Legacy Deo has a long history of helping individuals, families, churches, schools, and ministries steward God’s gifts for lasting impact. Legacy Deo’s SGO extends that mission into scholarship giving. It gives donors a new way to support Christian education and gives schools a trusted partner to help administer scholarship opportunities with integrity, transparency, and care.
What should schools, donors, and families do now?
Schools should begin learning how the program works, communicating with families and donors, and preparing a plan for scholarship awareness.
Donors should learn about the Education Freedom Tax Credit, watch for updates from Legacy Deo’s SGO, and speak with a tax advisor.
Families interested in Christian education should stay in conversation with their school, ask about scholarship opportunities, and watch for application timelines.
A New Opportunity for Christian Education
The federal SGO program is more than a tax provision. It’s an opportunity to expand access to Christian education, support families, strengthen schools, and invite donors into a meaningful act of stewardship.
Through Legacy Deo’s SGO, scholarship giving can become a ministry that helps students grow in faith, learning, and service. As the program moves toward its 2027 launch, Legacy Deo will continue helping schools, donors, and families understand how to participate wisely and faithfully.