WHAT ARE SCHOLARSHIP GRANTING ORGANIZATIONS AND WHY DO THEY MATTER?
The federal tax credit scholarship program becomes effective in January 2027 and will offer dollar-for-dollar tax credits to all American taxpayers who donate up to $1,700 to approved Scholarship Granting Organizations (SGOs). This means that for every dollar donated to an SGO, the donor will pay one less dollar in federal income taxes. Tax credits are MUCH more valuable than charitable tax deductions because of this dollar-for-dollar benefit.
In turn, the SGOs will provide scholarships to eligible k-12 students which can be used for tuition, transportation, school supplies, and other educational expenses.
The projections for the amounts to be donated to SGOs are in the billions of dollars. But with great opportunity comes a critical challenge: quality control. The law includes minimal federal oversight, leaving donors and families with little guidance on which SGOs operate with integrity, transparency, and impact. Without safeguards, the risk of waste, fraud, and abuse could undermine the promise of this initiative.
AAA Scholarship Foundation (“AAA”) has been a highly respected and successful SGO since 2010. Donors, parents, and regulators have trusted AAA with hundreds of millions of dollars for educational scholarships that provide real positive social and economic benefits. Our mission has always been to ensure every dollar donated delivers meaningful educational opportunity. AAA’s new SGO Navigator initiative represents a natural evolution of that commitment: building infrastructure that protects families and strengthens the integrity of educational choice nationwide.
WHAT CONSTITUTES A HIGH QUALITY SGO?
As you begin to navigate the world of SGOs, we encourage you to work with experienced SGOs that promote quality choices, are aligned with your values, and are proven to be accountable. To assist you with your due diligence, below is a list of fiscal responsibility and governance questions to ask each SGO you’re considering:
• Does the SGO have clean (“unqualified”) audits/reviews for the past three years? Most good nonprofits should have their current audit posted on their website.
• Does the SGO have a policy against nepotism and/or candidates for office on the payroll?
• What is their staff experience in running non-profit organizations?
• Does the SGO have an outside party endorsement for good practices (i.e. Charity Navigator or Guide Star/Candid)?
• How many scholarships did the SGO award for the prior school year and what was the total dollar amount awarded?
• What percentage of the SGO’s prior school year revenues went to administrative costs?
• Ask the SGO to explain how they determine income for scholarship applicants and whether they outsource (or use AI) for that critical process.
AAA TAX CREDITS
Below is more information about AAA Scholarship Foundation. AAA tax credits are dollar-for-dollar tax reductions received by taxpayers from federal and state governments to incentivize investment in k-12 educational scholarships that provide positive social and economic benefits. Here are AAA’s answers to the fiscal responsibility and governance questions:
• Does the SGO have clean (“unqualified”) audits/reviews for the past three years?
Yes! Here is a link to our unqualified financial and operational audit reports.
• Does the SGO have a policy against nepotism and/or candidates for office on the payroll?
Yes, AAA’s policies prohibit nepotism and having candidates for office on our payroll.
• What is their staff experience in running non-profit organizations?
AAA’s leadership has been involved in running education non-profits since 1998 and have administered educational scholarships since 2002.
• Does the SGO have an outside party endorsement for good practices (i.e. Charity Navigator or Guide Star/Candid)?
Yes, AAA has a Platinum rating from Guide Star/Candid and a Four-star rating from Charity Navigator. The prestigious Guide Star Platinum Seal demonstrates the highest level of good management practices in a non-profit organization. The Four-Star Rating from Charity Navigator designates AAA as an official “Give with Confidence” charity, indicating that our organization is using its donations effectively.
• How many scholarships and grants did the SGO award for the prior school year and what was the total dollar amount awarded?
AAA awarded 11,826 scholarships worth $69,605,983 and $69,850,000 in grants during FY23-24.
• What percentage of the SGO’s prior school year revenues went to administrative costs?
AAA limited our administrative overhead to 2.18 percent for administrative funding during FY23-24.
• Ask the SGO to explain how they determine income for scholarship applicants and whether they outsource (or use AI) for that critical process.
AAA follows the National School Lunch Program guidelines for determining household income. We leverage technology in all of our processes for efficiency, but we rely on our own professional and experienced human employees to make all eligibility decisions.
We look forward to working with you to put your federal tax credits to work for the next generation of Americans!
EXPERIENCE
AAA has administered over $800 million of tax credit scholarships and education savings accounts (“ESAs”) since 2010—making us one of the most trusted names in education tax credits. Let us help you learn how to invest in education tax credits. We charge funders nothing for our tax credit services as we are a 501(c)(3) non-profit organization whose mission is to use tax credits to raise funds for educational scholarships.
IMPACT
AAA has leveraged funding from tax credits to assist tens of thousands of economically disadvantaged students successfully secure the resources needed to access quality k-12 educational options. These scholars go on to pull their families out of a vicious cycle of generational poverty, revitalizing communities, and reinvigorated local economies.
By investing in AAA tax credits, our donors know that their redirected tax dollars are helping children living in underserved communities to access the high-quality education that will set them on the path to future success, to contributing back to their communities, and to more fully participating in the American dream.