Scholarship Granting Organization Requirements
Scholarship Granting Organization Requirements
The Education Freedom Tax Credit (EFTC) creates a wonderful opportunity to expand educational opportunities, but the overwhelming startup expenses, administrative hassles and technological challenges involved in establishing and maintaining a new Scholarship Granting Organization (SGO) quickly reveal that partnering with ACE is a better option.
501(c)(3) Formation & Operational Requirements for SGOs
Formation Process & Cost
- 501(c)(3) legal filing, IRS approval, state registration
Financial Efficiency & Overhead
- 90% of funds raised go directly to scholarships
- Overhead capped at 10% must cover all associated operational, marketing and fundraising costs
Legal & Regulatory Compliance
- Register for charitable solicitation in each state
- Comply with state and federal laws
- Meet state and federal eligibility laws
- Legal and financial audits to meet IRS / state standards
Program Operations
- Family qualification and selection process
- Awarding scholarships and funding schools and vendors
Staffing & Support
- Customer support for families and providers
- Program management to oversee scholarship operations
Fundraising and Marketing Strategy
- Dedicated team for donors, families and schools / vendors
Technology to Scale
- Digital, low-touch/high-volume operating model
- Multi-lingual capabilities
- Data privacy/security compliance, SOC2
501(c)(3) Formation & Operational Requirements for SGOs
Formation Process & Cost
- 501(c)(3) legal filing, IRS approval, state registration
Financial Efficiency & Overhead
- 90% of funds raised go directly to scholarships
- Overhead capped at 10% must cover all associated operational, marketing and fundraising costs
Legal & Regulatory Compliance
- Register for charitable solicitation in each state
- Comply with state and federal laws
- Meet state and federal eligibility laws
- Legal and financial audits to meet IRS / state standards
Program Operations
- Family qualification and selection process
- Awarding scholarships and funding schools and vendors
Staffing & Support
- Customer support for families and providers
- Program management to oversee scholarship operations
Fundraising and Marketing Strategy
- Dedicated team for donors, families and schools / vendors
Technology to Scale
- Digital, low-touch/high-volume operating model
- Multi-lingual capabilities
- Data privacy/security compliance, SOC2
ACE offers a strategic alternative for organizations considering becoming a qualifying SGO. Here’s how we can collaborate to your benefit:
- EFTC Program Management: ACE handles administration
- Ensuring compliance and operational efficiency
- Recruiting and retaining mission aligned staff
- Launching national and state marketing campaigns
- Providing in-house, multi-lingual customer support
- Donor Facilitation
- Your donors contribute through ACE on a co-branded page
- ACE handles all contribution processing, tracking, and reporting
- Digital Infrastructure
- ACE provides a secure digital wallet to distribute funds on your behalf
- Your parents and schools have access to a personalized dashboard and real time data and analytics
- Revenue Sharing & Growth Support
- ACE retains a portion of the funds to manage the program effectively and ensures full compliance, while your organization receives the remaining funds to reinvest in advancing your mission and creating greater impact
Strategic Partners: A Win-Win Solution
As organizations evaluate the possibility of forming SGOs, they soon discover the overwhelming administrative and technological challenges of the effort. Let ACE help so you can make the most of the EFTC opportunity and stay focused on what’s truly important—students, families, and the educational mission of your organization.
