The Education Freedom Tax Credit turns on January 1, 2027, and the organizations it funds, Scholarship Granting Organizations, mostly do not exist yet. Forming one is not mysterious, but the steps live in a dozen different places: state corporation law, the IRS exemption process, charity fundraising regulators, and a brand-new federal framework that Treasury set out in proposed and temporary regulations on October 1, 2026. This builder puts the whole sequence in one place, in order, with the rules that are proposed rather than final clearly marked.

We publish it free because we are in the SGO industry and the industry is better off when starting an SGO is easy. No paywall, no signup required to read every page.

Where are you starting from?

Starting from scratch →No organization yet. Begin at stage 1 and the builder walks you from nothing to a bank-ready 501(c)(3), then onward to the state list.Already a nonprofit →Incorporated and tax-exempt? Run the retrofit audit: check off what you already have and close the handful of §25F-specific gaps, then continue from stage 2.

The five stages

Form the nonprofitFrom nothing to a bank-ready 501(c)(3): incorporate, get your EIN, adopt bylaws, hold the first board meeting, and apply for federal tax exemption. The order matters, and it is the same in every state.7 steps →Qualify as a Scholarship Granting OrganizationThe federal tests your organization must satisfy under §25F and Treasury's October 2026 regulations, and that its own governing documents must EXPRESSLY require before a state will list a new SGO.6 steps →Register to solicit donationsBefore you ask the public for money, most states want you registered with their charity regulator. This is the layer almost every new nonprofit misses, and for an SGO it is also part of qualifying for each state's §25F list.2 steps →Get on your state's SGO listThe step that turns a scholarship charity into a credit-eligible SGO. Donations only generate the federal credit when a participating state puts you on the list it submits to the IRS, every year, and you have registered with the IRS to issue donor numbers.3 steps →Stay compliant, every yearWhat a running SGO owes the IRS, its states, and its donors: the annual filings, the continuous duties, and the §25F-specific obligations in Treasury's October 2026 regulations.3 steps →

How we keep this accurate

  • Every claim traces to a primary source: the §25F statute text (we host the full archived section), IRS notices and pages, and Treasury releases, not blog summaries.
  • Rules that come from Treasury’s proposed regulations (October 1, 2026) carry a visible Proposed rule tag: taxpayers, SGOs, and states may rely on them for 2027 contributions, but they are not final, and we re-verify every tagged item when the final regulations publish. Rules from the temporary regulations, like IRS SGO portal registration, donor acknowledgments, and the state-list procedures, are binding rules, not proposals, that apply from September 1, 2026.
  • The moving parts, like the list of participating states, are tracked live on our state opt-in tracker and news feed.
All of it is live: a free account saves your checklist across devices, your dashboard computes your deadline calendar, the document templates fill themselves in from your answers, and account holders get an email the day their state’s SGO list process moves.

Already running an SGO?

Skip the builder: claim your listing in the SGO directory, check the compliance calendar, and read how the federal SGO list works.