Fort Wayne's schools foundation is setting up a §25F SGO for Indiana's largest district, and Sarasota County's may follow

Two public school foundations in states that have already opted in are getting ready to take donations under the federal Education Freedom Tax Credit (§25F). The Fort Wayne Community Schools Foundation is preparing to serve as the scholarship granting organization (SGO) for Fort Wayne Community Schools, Indiana's largest district with more than 28,000 students, Education Week reported on Friday, October 30. On Saturday, Jennifer Vigne, president and CEO of the Education Foundation of Sarasota County, wrote in SRQ Magazine that her foundation is “exploring options to establish an SGO as a locally focused program to support eligible students attending Sarasota County public schools, including charter schools.” Both states joined in January (Indiana, Florida), so a gift to an SGO on either state's list can earn the credit starting January 1, 2027.

Fort Wayne is building an Opportunity Fund. Rena Shown became the foundation's executive director in June and is its only full-time employee. Since then she has been setting up the foundation's Opportunity Fund, which will take individual donations and award the federal scholarships to district students, according to Education Week; the foundation itself will keep working with companies and other foundations on grants outside the program, such as new science labs. Shown and a lawyer are now preparing the application to Indiana, which runs one Department of Education form for its own SGO program and the federal list. To be on Indiana's 2027 list, an organization must apply and be approved by December 31, 2026. The spending ideas start with families. About 900 students use YMCA before- and after-school programs at district schools, at roughly $450 a month, and hundreds more families want spots; Shown sees scholarships helping families pay for it and letting the YMCA serve more of them. She also has in mind students with disabilities who need more occupational, speech or physical therapy, which a local nonprofit could provide: “Maybe you should be getting therapy three times a week at school and you're only getting it one.”

Payroll giving is the donor plan. Shown, who worked on payroll-giving campaigns at United Way, wants Fort Wayne employers, the district included, to add the SGO to their payroll-deduction options so employees can give straight from their paychecks. “All they really have to do is allow our SGO to be one of the entities that they include,” she said. If 10% of the district's roughly 5,000 employees gave the full $1,700, she estimates, the fund would take in about $850,000 next year, and she expects “millions” a year once more community partners come on board. She is also reaching out to alumni associations. A donor in any state can claim the credit for a gift to an SGO on a participating state's list, while the scholarships stay with students in that state (how state lines work), and a gift can go to the district's SGO but can't be earmarked for a particular student (what donors can designate). The catch Shown flagged is recordkeeping. Under the proposed rules, an SGO gives every donor a unique donor number, sends each one a written acknowledgment by January 31, and reports each donor's name, address and yearly total to the IRS by February 28 (proposed § 1.25F-4(c)). A payroll program has to pass that donor-level detail along to the SGO, which is more than many employers send for other workplace giving.

Some ideas fit the rules better than others. This past year Fort Wayne began charging a $100 enrollment fee for its pre-K programs after state cuts, and Shown would like Treasury to read the allowable expenses more broadly. The proposed rules point the other way: they take the meaning of “school” from section 530(b)(3)(B), a school providing elementary or secondary education, “kindergarten through grade 12,” as determined under state law, so a pre-K fee looks out of reach. Before- and after-school care is closer. The section 530 expense list covers supplementary services, including extended day programs, that a school requires or provides, and Treasury's fact sheet names “qualifying extended day programs.” Whether a YMCA program run at district schools counts as provided by the school is the kind of question Treasury's coming guidance on qualified expenses should settle. Special needs services are on the list for a student with special needs (our special needs guide). There is time to work it out: an SGO has until the end of the year after a gift arrives to meet the 90% spending test, so 2027 donations can be awarded through December 2028 (the two-year window), though Shown expects to start awarding well before then.

One structural question for any district foundation. Education Week doesn't say whether the Opportunity Fund will be its own nonprofit or an account inside the foundation, and under the proposed rules that choice matters. The 90% spending test runs on an organization's total gross receipts unless at least 85% of its activities are scholarship granting; only an SGO that clears that bar can run the test on its separate §25F account instead (proposed § 1.25F-3(c)(2) and (c)(4); the 85% safe harbor). A foundation whose main work is grants for things like science labs would, as the SGO itself, have to spend 90% of everything it takes in on scholarships. That is one reason Colorado's public school foundations, the Denver Public Schools Foundation among them, are each forming a separate nonprofit to be the SGO, and why our guide to turning an existing nonprofit into an SGO starts with this test. Denver's chief financial officer, Chuck Carpenter, told Education Week the program brings hurdles districts aren't used to, but “once you figure that out, you may have a great revenue source that may even attract more kids to public schools.”

Sarasota is weighing its own SGO. Elsewhere in Florida, the Pasco County school board signed a three-year contract on October 20 to take part through Step Up For Students' federal fund, and Pinellas may follow. The Education Foundation of Sarasota County is looking at the other route. Vigne wrote that the foundation sees “tremendous potential” in the credit and that scholarships could help with costs like academic tutoring, technology and school supplies “without requiring her or any student to leave their public schools.” The foundation will share updates “as federal guidance and our plans take shape,” she wrote. Florida hasn't yet published how it will collect its SGO list or named the office that will run it. Its first list is due to the IRS by February 15, 2027, and under Treasury's temporary regulations, which take effect without a comment period and apply from September 1, 2026, the list must include every organization located in Florida that asks to be listed and meets the federal requirements.

What it means for SGOs. Fort Wayne and Sarasota show the choice every public school foundation in a participating state faces this fall: become the SGO, with the paperwork and the 90% test that come with it, or partner with an established one, as Pasco did. Whichever route it takes, the money pays for a student's qualified expenses rather than the district's budget, and the dates are close: Indiana approvals by December 31, and every state's list to the IRS by February 15, 2027. They join other public school systems already moving, from Bristol Warren, Anne Arundel and Vienna, Illinois to Mead, Washington. Our guide to §25F for public schools covers what a district can do, the free SGO Builder walks a foundation through forming an SGO, how to apply in Indiana lays out the state's form, and the Indiana and Florida pages track each state.