The school choice movement is about one simple idea: every family regardless of ZIP code or income should be able to choose the education that’s best for their child. In 2025, that idea took a huge step forward with the passage of the Educational Choice for Children Act (ECCA), and Scholarship Granting Organizations (SGOs) are now in the spotlight.
What Are SGOs and How Do They Help Students?
An SGO is a nonprofit that raises private donations and awards scholarships to K–12 students for approved educational expenses for private school tuition, homeschooling resources, tutoring, therapies, even dual enrollment courses.
They don’t just write checks. SGOs open doors especially for families who might never have considered a private school or specialized program. They give parents the power to match their child’s learning needs with the right environment.
ECCA: A Federal Game Changer, Upcoming Decisions and Deadlines, and Why This Moment Matters
ECCA creates a permanent, dollar-for-dollar federal tax credit up to $1,700 per taxpayer per year for donations to SGOs. There’s no national cap, and eligible families can earn up to 300% of their area’s median income and still qualify.
Here’s the catch: states must opt in. Only SGOs in those states will be able to receive ECCA-eligible donations starting in 2027. That makes the next year critical for governors, legislators, and advocates.
Why Advocates Believe This Helps All Students
School choice supporters from the National School Choice Awareness Foundation to EdChoice argue that empowering families benefits the entire education ecosystem:
- Equity & Access: Scholarships extend opportunity to low- and middle-income families, not just the wealthy.
- Parental Empowerment: Parents not systems decide what’s best for their children.
- Healthy Competition: When families have options, all schools have more incentive to innovate and improve.
- Private Funding for Public Good: Dollars come from private donors, leveraging federal incentives rather than draining public school budgets.
As EdChoice puts it, ECCA is the most ambitious federal school choice law to date and it is simple to administer, free from heavy federal strings, and potentially worth billions in scholarships for American families.
Upcoming Decisions and Deadlines
In the months ahead:
- State Opt-In Battles – North Carolina has already moved to join ECCA; other states will decide whether to follow.
- SGO Readiness – Organizations are ramping up donor systems, compliance processes, and outreach strategies.
- Regulatory Guidance – The Treasury and IRS will finalize rules, and states will define oversight for certified SGOs.
Where It’s Easiest and Hardest to Be an SGO
Some states already have the infrastructure and political will to make SGOs thrive: Arizona, Florida, and Pennsylvania lead the pack, with mature tax-credit programs and broad eligibility rules. Others, like Alabama, Georgia, and New Hampshire, also have strong choice environments.
Meanwhile, in states with political resistance to school choice or those with heavy administrative barriers SGOs face a steeper climb. Without opt-in, ECCA benefits simply will not be available to residents.
Why This Moment Matters
If your state opts in, SGOs will have a once-in-a-generation opportunity to expand their reach. For donors, the new tax credit is a powerful reason to give. For families, it could mean the difference between “making do” and finding a school where their child can truly thrive.
The window is open but not forever. The next few months will set the tone for how widely ECCA’s benefits are felt across the country. For those who believe in education freedom, the time to engage is now.
At Bearing Tree, we champion Scholarship Granting Organizations because they open doors for students and empower families to choose the best education possible. We handle the details so SGOs can focus on changing lives.