In a guide for donors, the Philanthropy Roundtable argues that the Federal Scholarship Tax Credit—which takes effect Jan. 1, 2027, letting taxpayers claim a nonrefundable federal credit up to $1,700 for donations to scholarship-granting organizations—is entering a critical policy-to-implementation phase with a short runway, and that philanthropy can play a distinctive role beyond the credit itself. With 30 states having made advance elections and Treasury’s proposed regulations expected by the end of September, the Roundtable frames the credit as capable of generating major new K-12 resources that nonetheless can’t, alone, build the infrastructure to move dollars, reach families, or ensure quality options exist.
The guide lays out six areas donors should watch: get the rules right (funding legal and technical expertise to interpret Treasury regulations, citing Defense of Freedom Institute and ExcelinEd); get states in (research and coalition-building where participation is undecided, naming 50CAN, Democrats for Education Reform, and American Federation for Children); get dollars flowing (SGO infrastructure and donor-acquisition channels through tax preparers, advisers, and employers, citing ACE Scholarships, AFC Scholarship Fund, Children’s Scholarship Fund, and Step Up For Students); get families enrolled (outreach and navigation via trusted local institutions); get schools ready (risk-tolerant capital to develop new schools and leaders, citing VELA and Education Freedom Foundation); and protect the program (building legal and compliance capacity before disputes arise, citing Education Freedom Legal Network). The overarching advice is to “follow the bottleneck”—recognizing the binding constraint will shift over time from rules to participation to supply to legal capacity—and to ask where a philanthropic dollar can remove a bottleneck or create capacity that wouldn’t otherwise exist.