EFTC Basics | Educational Guide
How Do I Find a Qualified SGO? A Donor’s Evaluation Guide
Not every organization that says it supports school choice is federally qualified to generate the EFTC. Here’s how to evaluate any SGO before you give — and the six questions that separate credible from questionable.
The Education Freedom Tax Credit only works if the SGO qualifies. Not every organization that claims to support school choice actually generates the credit — and the difference matters.
Finding a federally qualified Scholarship Granting Organization requires a little due diligence. This guide walks through exactly what to look for, what questions to ask, and what answers should raise flags.
Start With Qualification Documentation
The most important question you can ask any potential SGO: Can you provide documentation of your federal qualification status?
A qualified SGO should be able to tell you clearly whether it meets the federal criteria to generate the Education Freedom Tax Credit for donors — and should be able to support that claim with documentation. Vagueness about qualification status, or an inability to produce verifiable evidence, is a red flag.
“If an organization can’t answer ‘Are you federally qualified?’ with documentation, that’s your answer.”
Questions to Ask Before You Give
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.
Why Track Record Matters
The EFTC is a new federal program, but some organizations have been operating in the school choice scholarship space for years. AFC Scholarship Fund has invested more than $11 million since 2021 and supported 157,000 students across 12 states. That track record is evidence of operational capability, compliance discipline, and genuine commitment to the mission.
AFC Scholarship Fund is the scholarship arm of the American Federation for Children — the nation’s largest school choice advocacy organization. It is built specifically to operate as a federally qualified SGO under the EFTC framework, with the compliance infrastructure, donor documentation processes, and scholarship distribution systems that a federal credit requires.
Donors receive written confirmation of their contribution, documentation of the SGO’s qualification status, and the information needed to claim the EFTC on their federal return. That’s not a promise — it’s the infrastructure AFC has been building since 2021.
Frequently Asked Questions
How do I find a qualified SGO for the EFTC?
Look for nonprofits that claim EFTC qualification status and can provide documentation. Ask about their federal qualification, distribution rate, and track record. AFC Scholarship Fund is designed to be a trusted, compliant option.
What questions should I ask before donating?
Ask about federal qualification documentation, the percentage distributed as scholarships, distribution timelines, student eligibility verification processes, and the organization’s compliance infrastructure.
How can I verify an SGO’s qualification status?
Ask the SGO directly for documentation. You can also consult a tax advisor who is tracking EFTC implementation. Be cautious of organizations that claim eligibility without providing verifiable evidence.
What’s the difference between a qualified SGO and a regular nonprofit?
A qualified SGO meets specific federal criteria — including the 90% distribution requirement — that enable donors to claim the EFTC. Not every education-related nonprofit meets these requirements.
Disclaimer: This article is for informational and educational purposes only and does not constitute tax, legal, or financial advice. Tax laws are subject to change. Please consult a qualified tax professional regarding your individual circumstances. The Education Freedom Tax Credit is effective January 1, 2027. Contribution limits and program details are subject to IRS guidance and final program rules.