Employer Advised Fund - AAA Scholarship Foundation

Introducing AAA’s new Employer-Advised Fund

AAA’s new Employer-Advised Fund works like a charitable investment account with one purpose. It helps your employees fund Education Freedom Scholarships and earn a dollar-for-dollar federal tax credit. It does so by using the new Education Freedom Tax Credit (officially the Federal Scholarship Tax Credit). Only individuals can claim the credit, so gifts from your company itself do not qualify.

HOW THE FEDERAL CREDIT WORKS

This new federal program begins January 1, 2027. It aims to expand educational options for school aged children (up to grade 12) in participating states. To do so, it encourages donations to SGOs like AAA Scholarship Foundation. For more details, see the IRS overview of the Federal Scholarship Tax Credit.

Current and former employees who give to the fund will designate their gifts for scholarships for eligible students at their chosen school(s).*

THE TAX BENEFIT FOR YOUR EMPLOYEES

In return, your employees will receive a dollar-for-dollar federal tax credit of up to $1,700 per taxpayer. Married couples filing jointly can receive up to $3,400. In other words, they will owe one dollar less in federal income tax for every dollar they give, up to the credit limit and the tax they owe. By comparison, a gift directly to a nonprofit earns only a charitable deduction. Because deductions depend on marginal tax rates, that gift would lower their federal income tax only slightly.

HOW WILL AN EMPLOYER-ADVISED FUND WORK?

First, AAA will work with your company to market the benefits of the fund to current and former employees.
Next, your employees will designate their AAA federal tax credit gifts to their chosen states, cities, school districts or specific schools.
Then, your company or employees may recommend eligible students to apply for AAA’s Education Freedom Scholarships through your fund’s page.
Finally, your company will have insight into, and visibility of, the fund so you can gauge its impact.

JOIN THE EMPLOYER-ADVISED FUND UPDATE LIST

Does this sound like a good fit for your employees? If so, please complete the interest form below. We will then add you to our contact list and share more information as it becomes available. We look forward to offering this new service and hope you will make it available to your employees.

AAA Employer-Advised Fund Update List

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*Compliance Notice: The AAA Employer-Advised Fund is a designated referral account within the AAA Scholarship Foundation (AAA), a 501(c)(3) SGO. Under IRC Section 25F, donors may not earmark contributions for a specific student. While AAA intends to prioritize funds for students based on company and school recommendations, AAA keeps absolute discretionary authority over all awards. AAA may also reallocate funds to other eligible students to meet federal spending requirements. Program features, including student recommendations, remain subject to the final federal regulations.