Written by Lawrence M. Furey, Founder, Partners in Mission, and Board of Directors, National Catholic Educational Association, larryfurey@larry-furey.com
January 1, 2027, will mark an important new chapter for American education and, in particular, for Catholic schools across the country. With the launch of the Federal Scholarship Tax Credit (FSTC), individuals will have a new opportunity to support scholarships for elementary and secondary school students while receiving a federal tax credit for qualifying contributions to Scholarship Granting Organizations (SGOs).
For Catholic school leaders, this is more than a new funding mechanism. It is an opportunity to expand access to Catholic education, engage new supporters, deepen relationships with existing donors, and strengthen the long-term sustainability of our schools.
The question facing Catholic school presidents and advancement professionals is not simply how to participate in this new program. It is how to thoughtfully integrate it into a comprehensive advancement strategy.
Understanding the Opportunity
Beginning January 1, 2027, eligible individual taxpayers may receive a nonrefundable federal income tax credit of up to $1,700 for qualifying cash contributions to approved SGOs. Married couples filing jointly may be eligible for a combined credit of up to $3,400.
The program is voluntary for states. To qualify for the federal credit, contributions must be made to an SGO included on the approved list submitted by a participating state. These organizations award scholarships to eligible students for qualifying elementary and secondary education expenses.
For Catholic schools, the potential impact is significant. By working with qualified SGOs, schools can help connect families with additional scholarship opportunities and engage individuals who are passionate about making Catholic education more accessible.
However, participation requires preparation, an understanding of the regulations, and collaboration among schools, donors, dioceses, and SGOs.
Advancement Must Lead the Conversation
One of the most important considerations for Catholic school leaders is understanding where the FSTC fits within their existing advancement programs.
Our annual fund, major-gift initiatives, endowment programs, planned giving, and capital campaigns remain essential to the financial health of our schools. These programs support the mission in ways that extend well beyond tuition assistance, including faculty development, academic programs, campus improvements, technology, and the overall student experience.
The federal tax credit should complement these efforts—not compete with them.
Advancement professionals will need to become knowledgeable about the program and develop a coordinated approach to donor communication. Some individuals may see the tax credit as an entirely new way to support Catholic education. Others may be existing donors who want to understand how this opportunity fits alongside their current philanthropic commitments.
The conversation should begin with the donor’s desire to make a difference. We must help supporters understand the various ways they can participate in the mission while ensuring that traditional giving programs remain strong.
This is also an opportunity to reach beyond our established donor base. Alumni, grandparents, parents, business leaders, and community members who believe in Catholic education may become new partners in advancing our mission.
The Importance of SGO Partnerships
SGOs will play a central role in administering this program. Catholic school leaders should begin identifying and building relationships with reputable SGOs, understanding their scholarship programs, eligibility requirements, application processes, and reporting responsibilities.
Strong partnerships will be essential to helping families navigate available opportunities and ensuring that donors understand how their contributions can support students.
This work should not be undertaken in isolation. Presidents, principals, advancement directors, diocesan leaders, finance professionals, and SGO representatives must work together to develop an approach that aligns with the school’s mission and broader financial objectives.
Preparing Today for Tomorrow’s Opportunity
With January 1, 2027, approaching, the time to prepare is now.
Catholic school leaders should be asking several important questions:
- Which SGOs are approved to participate in our state?
- How can we communicate this opportunity effectively to our current and prospective donors?
- How will we coordinate SGO partnerships with our existing scholarship and financial assistance programs?
- How can we identify new supporters who may be interested in participating?
- How do we ensure that this opportunity strengthens rather than disrupts our current advancement priorities?
The schools that approach this opportunity strategically will be better positioned to make the most of its potential.
Advancing the Mission Together
Throughout the history of Catholic education, our schools have depended on the generosity and commitment of individuals who believe every child deserves the opportunity to experience an education rooted in faith, academic excellence, and service.
The FSTC provides another avenue for that generosity to make a difference.
As we prepare for its implementation, our responsibility as Catholic education leaders is to understand the opportunity, ask the right questions, build the right partnerships, and develop strategies that advance our mission for generations to come.
I look forward to exploring these opportunities with Catholic school presidents and advancement professionals during two upcoming NCEA webinars:
Advancing Catholic Education: Integrating the Federal Scholarship Tax Credit Program into Your Advancement Program Strategy
These sessions will bring together practical advancement strategies and the perspective of an experienced SGO leader to help schools navigate this new landscape.
The opportunity before us is significant. The challenge—and the responsibility—is to ensure that we approach it strategically, collaboratively, and always with the mission of Catholic education at the center.
