A lot of organizations claim to support education. Only a specific kind — one that meets strict federal criteria — actually generates the Education Freedom Tax Credit for donors. That organization is called a Scholarship Granting Organization.
The SGO is the bridge between donor generosity and student opportunity. It’s the entity whose federal qualification status determines whether your contribution generates a dollar-for-dollar federal tax credit. Understanding what an SGO is — and what it isn’t — is the first thing any serious EFTC donor needs to know.
What an SGO Is
An SGO — Scholarship Granting Organization — is a 501(c)(3) nonprofit that accepts charitable contributions and distributes at least 90% of those funds as scholarships to eligible K–12 students. The organization must meet specific federal criteria established under the Education Freedom Tax Credit framework.
About AFC Scholarship Fund
AFC Scholarship Fund is the scholarship arm of the American Federation for Children — the nation’s largest school choice advocacy organization. As a qualified SGO, it exists for a single purpose: ensuring that a family’s zip code does not determine the quality of their child’s education.
Since 2021, AFC has invested more than $11 million and helped 157,000 students across 12 states access programs that fit them. It is built for the EFTC era — with the compliance infrastructure, donor documentation processes, and scholarship distribution systems that a federal credit requires.
What an SGO Is Not
Three Common Misconceptions
- An SGO is not a government agency. Contributions to an SGO are private charitable donations. No government body directs, handles, or controls the funds at any point in the process.
An SGO is not tied to any particular school or network. AFC Scholarship Fund distributes scholarships to eligible students who choose the educational program that fits their family — not to specific institutions. - Not every education nonprofit is a qualified SGO. An organization must specifically meet the federal criteria — including the 90% distribution requirement — to generate the EFTC for donors. Always confirm qualification before contributing.
Be the First to Know
Get notified when the Education Freedom Tax Credit launches so you don’t miss the opportunity to support K–12 students while benefiting from a federal tax credit.
Who Receives SGO Scholarships?
Approximately 90% of American students are eligible for the scholarships that SGO contributions support. Priority under the EFTC is given to lower-income families — the families for whom a scholarship could be the difference between a school that works for their child and one that doesn’t.
90%
Of American students are eligible for SGO scholarships
$11M+
Invested by AFC in school choice since 2021
12
States where AFC has connected students to opportunity
Scholarships go directly to eligible students — not to schools, not to any government agency. The student’s family receives the scholarship and directs it to the educational program that best fits their child. Funds can be applied to tuition, fees, tutoring, curriculum, and other qualified educational expenses.
An SGO is a federally qualified 501(c)(3) nonprofit that accepts charitable contributions and distributes at least 90% of those funds as scholarships to eligible K–12 students. The SGO must meet specific federal criteria to generate the EFTC for donors.
No. Not every nonprofit qualifies. The organization must meet specific federal criteria, including the 90% distribution requirement. Always confirm an organization’s SGO qualification status before contributing.
At least 90% of contributions must be distributed as scholarships to eligible students. This federal requirement ensures the large majority of donor funds reach students directly.
Approximately 90% of American students are eligible, with priority given to lower-income families. Scholarships can be applied to tuition, fees, tutoring, and other qualified educational expenses at eligible programs.
