Scholarship Granting Organizations or SGOs are non-profit organizations that receive contributions or donations from businesses, corporations, foundations, or individuals and use them in the form of scholarships or a children’s education fund to help eligible students to attend a qualified private school of their choice.

In the simplest terms, the purpose of a scholarship granting organization is to provide educational opportunities to students who need it the most. They set up a children education trust with tax-credit contributions that is solely used to fund the education of underprivileged students.

There are certain requirements and certifications to meet before an organization can become a scholarship granting organization. The requirements in every state may vary, but these are generally what an organization should meet:

  • The organization must be defined by the Internal Revenue Service as 501 (c) 3 tax-exempt.
  • The organization must provide scholarships to eligible students according to state legislation (for example, the Invest in Kids Act in Illinois.)
  • The organization must be approved by the appropriate department (for some states this is the department of education, for some it is the department of revenue) before they can legally accept contributions or issue tax-credit receipts to those who will contribute.

What is the significance of scholarship granting organizations?

The main purpose of a scholarship granting organization is to provide opportunities not just to underprivileged students but also to help individual taxpayers or businesses. For instance, many scholarship granting organizations work in states that have tax-credit programs that can be taken advantage of by qualified business entities and individual taxpayers. In return for their donation or contributions to a children education trust set up by a scholarship granting organization, individuals and businesses can receive tax-credits.

Tax-credit programs provide a lot of benefits to individuals and business entities while at the same time, it helps provide children’s education funds to scholarship granting organizations. It is a mutually beneficial situation for all parties involved. SGOs who offer tax credit programs can help taxpayers and businesses reduce their tax liabilities. In return, they can advance their goals and objectives in helping children coming from low-income families.

The Bigger Role of Scholarship Granting Organization

On a larger scale, scholarship granting organizations help shape schools and educational policies. Far too often, many schools suffer from limited resources and opportunity gaps. With the funds coming from SGOs, it can help advocate for policies that can improve access to an excellent education for anyone – regardless of economic background. It can also fund the training needed by teachers to provide better instruction methods.

Scholarship granting organizations exist to improve education in the United States. Knowing that many schools and educational institutions face many problems regarding funding and policies, SGOs provide resources to provide high-quality education to all children.

Final Thoughts

Addressing and solving the problems in education requires substantially great coordination efforts between institutions. With the help of individuals, business entities, and government programs, scholarship granting organizations can change the lives of many. Schools and grantees get better access to quality education, resources, and powerful networks. They have a large impact on society and thereby aim to change educational institutions, industries, and specific communities for the better.

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