SGO 90/10 rule compliance calculator
Check whether your Scholarship Granting Organization meets the §25F 90/10 rule. Enter your qualified contributions and scholarship spending to see your scholarship ratio, your 10% administrative headroom, and exactly how much more must go to scholarships if you're short.
Total §25F qualified contributions received.
Total spent on (or committed to) scholarships.
§25F requires ≥90% of income to fund scholarships (≤10% admin). Treasury previewed a segregated-account safe harbor and per-state accounting for multistate SGOs, track the ratio per state account, not just in aggregate. Estimate only; confirm against final rules and your auditor.
How this works
- §25F requires an SGO to spend at least 90% of its income on scholarships, leaving at most 10% for administration.
- Enter your total qualified contributions (receipts) and the amount spent on scholarships.
- We compute your scholarship ratio and your remaining administrative headroom.
- Treasury previewed a safe harbor that measures the 90% test against a segregated §25F account, a real platform tracks this continuously, per state account.
Questions, answered
Is the 90% measured against revenue or profit?
Against income, not net profit. Treasury's preview measures the test against the organization's total receipts, with a safe harbor letting largely scholarship-focused SGOs measure 'income' by the amount held in a §25F segregated account. Either way you must direct at least 90% to scholarships.
What can the 10% be spent on?
Reasonable administrative and operating costs, staff, software, audits, compliance, fundraising overhead. The cap is 10% of income, so as receipts grow, so does your absolute admin budget.
Does the test apply per state for multistate SGOs?
Per Treasury's preview, a multistate SGO maintains a separate §25F account per state and the safe harbor must be satisfied separately for each state account, so you should track the 90/10 ratio per state, not just in aggregate.
Learn more
- The 90/10 rule & SGO complianceA deep dive into the federal §25F rules every Scholarship Granting Organization must meet: the 90% income-to-scholarships requirement and 10% administrative cap, the 10-student rule, renewal and sibling priority, anti-earmarking, the self-dealing prohibition, separate-account rules, donor substantiation, and income verification.
- How to start an SGOThe complete, start-from-nothing guide to launching a Scholarship Granting Organization (SGO) for the federal Education Freedom Tax Credit (EFTC / ECCA / §25F): incorporating a nonprofit, getting an EIN, filing for 501(c)(3) (Form 1023 vs 1023-EZ, real fees and timelines), opening the required separate bank accounts, registering to fundraise, meeting every §25F operating rule, getting on your state's list, and a step-by-step checklist, written for founders with zero nonprofit experience.
- The proposed regulations, previewedTreasury says the §25F (EFTC / FSTC) proposed regulations arrive by the end of September 2026 — and previewed their content: the 90% segregated-account safe harbor, the multistate SGO path, income-verification safe harbors, annual audits, unique donor numbers, and an IRS portal. A practical walkthrough of each item.
- Scholarship Granting OrganizationsWhat an SGO is, how organizations get designated by their state, the 90/10 rule, what compliance looks like, and how donors and families choose between SGOs.
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