This is the stage that separates an SGO from a generic scholarship charity. The tests below come straight from the statute (we host the full §25F text), and the previewed federal framework raises the stakes on where they live: your state will be certifying, under penalties of perjury, that it independently verified your organization is required by its organizational documents or bylaws to satisfy each one.

Some rules are still provisional. Items marked provisional come from Treasury’s June 2026 preview of the §25F framework. Proposed regulations are expected by the end of September 2026; we re-verify every provisional item the week they publish, and our news feed tracks each change.

The requirements

  1. Three structural tests, all properties of what you already built: 501(c)(3) public charity (your 1023 classification), governing documents that REQUIRE §25F compliance (the bylaws template's Article VIII), and the segregated §25F account. If stage 1 went by the book, this is a checkmark, not a project.

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  2. Five rules in your award policy: 10+ students across more than one school, prior-year recipients then siblings first, no donor earmarking, household income at or below 300% of area median, and no scholarships to insiders. Your bylaws already require them; here you operationalize.

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    Who qualifies for scholarshipsEligibility calculator

  3. At least 90% of ALL income goes to scholarships (Treasury's anticipated reading counts every dollar, not just §25F gifts), and scholarships pay only qualified §530(b)(3)(A) expenses: tuition, fees, tutoring, books, computers, special-needs services.

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    90/10 deep dive90/10 calculatorQualified expenses explained

The template is live: our free annotated SGO bylaws template encodes every requirement above as a governing-document obligation, clause by clause, with notes explaining each one.

Frequently asked questions

Do the SGO rules need to be in our bylaws, or is a policy manual enough?

Per Treasury's June 2026 preview, states must independently verify that each listed SGO is required by its organizational documents or bylaws to satisfy the §25F requirements, and SGO self-certification will not suffice. Until the regulations say otherwise, treat governing-document language as the standard and a policy manual as a supplement.

Does the 90% rule count all our income or just §25F donations?

Treasury's anticipated reading counts all income, not just the segregated §25F contributions. That is provisional until the proposed regulations publish.

Can a donor fund a specific child's scholarship?

No. §25F prohibits earmarking contributions for any particular student. Gift forms, campaigns, and donor conversations all need to respect it.