Public schools in Rhode Island, Maryland and Illinois are lining up SGOs before their states decide on §25F

Public school leaders in three states that haven't joined the federal Education Freedom Tax Credit (§25F) are getting ready for it anyway. On Monday, October 26, the Bristol Warren Regional School Committee in Rhode Island voted to move the credit up the list of issues it will raise with the area's state lawmakers, and members talked about finding a local scholarship granting organization (SGO) that residents could give to for Bristol and Warren students. On October 29, Education Week reported that the foundation for Maryland's 84,000-student Anne Arundel County Public Schools is working to set up its own SGO, and that a superintendent in southern Illinois has built one that other districts can join. None of the three states has opted in for 2027.

Bristol Warren wants a partner and answers from lawmakers. The motion, from Vice Chair Nicky Piper and seconded by Christine Barlow, passed on a voice vote, according to the committee's recording of the meeting. It sends lawmakers a memo ahead of a legislative breakfast expected in December that keeps the committee's four standing priorities and moves up a discussion of the tax credit. One member had been on a regional call that day with counterparts in Maine, New Hampshire and Vermont and reported that “other states are preparing” their own SGOs “so that public school students can get access to the money.” The district can't do it alone, the member said: “We're not quite big enough to be able to set up our own nonprofit,” and one district that looked into it put the setup cost at roughly $12,000 to $15,000, plus people to run it. “So we really need to look for a partner who would be willing to be that SGO,” so that residents claiming the credit could give close to home. Otherwise, the member said, “we're going to be giving our money away to other states who did opt in.” That is how the credit works: a donor anywhere can claim it for a gift to an SGO in a participating state, but scholarships follow the student's home state.

Rhode Island's own law sets the timetable. Another member doubted Rhode Island would be in for 2027, since the governor would have to act by the end of the year and the legislature would have to come back too. That reading holds. Since June, a law Gov. Dan McKee signed (R.I. Gen. Laws § 16-7-23(e), added by H 7163) bars the governor from electing in or sending the IRS an SGO list unless the General Assembly first passes, and the governor signs, a bill authorizing participation. Under Treasury's temporary regulations, which take effect without a comment period and apply from September 1, 2026, a state's 2027 election is due on Form 15714 by January 1, 2027, with its SGO list by February 15, 2027 (the full calendar). The February 15 date the first member cited is that list deadline, and an SGO only makes it onto a list once its state has elected. Elections are made one year at a time, though, so 2028 is open: a state can elect for 2028 between January 2 and September 30, 2027. A December breakfast, just before the General Assembly's 2027 session, is good timing to ask who will carry a participation bill.

Anne Arundel's foundation is building an SGO. In Maryland, Gov. Wes Moore hasn't decided; he said in June that he is “never going to leave money on the table when it comes to supporting kids in our public schools,” Education Week noted. Anne Arundel County Public Schools' chief financial officer, Matthew Stanski, told the publication that once it became clear in April that public school expenses could qualify, he connected with the Education Foundation of Anne Arundel County Public Schools, which already awards $750,000 to $1 million a year in grants and scholarships from donations. The foundation is working to establish its own SGO, and its executive director, Joe Callahan, is talking with SGOs that serve public schools nationwide about partnerships. Stanski is holding two steps until Moore decides: a payroll-deduction option for employees who want to give, and asking district leaders what the money should fund, which also waits on the IRS's guidance on eligible expenses. Callahan's reason for moving early is donor habit: once people start giving to other SGOs, it will be harder to win them over. “We need to be early adopters as much as we can be,” Callahan said. Stanski and Callahan expect the groundwork to pay off even if Maryland sits out 2027, since every governor decides again for 2028 and each year after.

Vienna, Illinois built one SGO for many districts. Joshua Stafford, superintendent of the Vienna High School District in far southern Illinois, stood with Chicago board member Angel Gutierrez in August to ask Gov. JB Pritzker to opt in. Stafford has also set up Alliance SGO, which describes itself as a 501(c)(3) “founded by educators” and a “turn key vehicle” that schools, taxpayers and families can partner with. The district's foundation gave an in-kind donation of “a couple thousand dollars” toward the launch, Stafford told Education Week, and the week before the story ran Stafford met with a group of Illinois district leaders to encourage them to team up on donations to it if Pritzker opts in. “We built it realizing that the vast majority of school districts will not have the ability to establish an SGO, and they shouldn't be penalized,” Stafford said. The district, with 330 high school students, has hovered between 52% and 70% of Illinois's school funding adequacy target, and Stafford wants scholarships to help bring back student support programs it lost when federal community-schools grants were canceled last December.

What it means for SGOs. The pattern is the same in all three places. A school district can't be the SGO itself, since an SGO must be a 501(c)(3), so the work runs through a district foundation that forms one (Anne Arundel), an SGO a superintendent builds for many districts (Vienna), or an outside partner (what Bristol Warren is looking for). The money pays for a student's expenses, not a district's budget: under the proposed rules an SGO pays the provider directly, pays the school for fees the school charges, or reimburses a family against a receipt (proposed § 1.25F-3(c)(5)), and Treasury's detailed guidance on which expenses qualify is still to come. These districts join public school systems already moving: the same night as Bristol Warren's vote, Mead's board in Washington asked Gov. Bob Ferguson to opt in, and boards in Pasco County, Florida and Moore County, North Carolina have voted to take part through an SGO. Our guide to §25F for public schools covers what a district can do, the free SGO Builder walks a foundation through formation, and the Rhode Island, Maryland and Illinois pages will carry each state's decision.