How To Start SGO



Indiana School Scholarship Tax Credit Plan \| Helping Families Achieve Education Goals




Home - Implementation Info Center Home - Scholarship Tax Credit New Content Draft SGO Application Administrative Rules Dept. of Education Dept. of Revenue Accrediting Agencies (Final) Approved Tests (Final) How to Start an SGO Best Practices Looking for: E-Newsletter Overview and FAQs Info for Parents Info for SGOs Info for Schools Info for Donors Copy of Statute	How to Start a Scholarship Granting Organization (SGO) September 2009 Answer the following questions before beginning the application process to make sure your organization is prepared to become an SGO. Do you and your organization have a mission to provide educational choice to Indiana children and their families? Has your organization been approved for IRS 501(c)(3) charitable status? It must be to qualify contributions for the tax credit. Do you have a fundraising base of donors interested in contributing to your organization? Don’t underestimate the difficulty in raising funds, especially in this time of economic hardship. It would be an injustice to children to begin providing scholarships if your organization cannot plan to sustain them next year and beyond. Does your organization have the ability to operate on 10% or less of the funds that you raise to administer the program? Note that at least 90% of the funds raised under the tax credit MUST be distributed in the form of school scholarships to eligible students. The more spent on students the better. Can you create a strategic plan to assure you will meet the needs of the families and kids you want to serve? For instance, you must market to both families and potential donating individuals and corporations to assure long-term sustainability. If you are an existing non-profit organization, adopt/revise Bylaws and Articles of Incorporation consistent with your scholarship mission. If you are creating a new organization, prepare and file Articles of Incorporation with the State of Indiana to become a non-profit corporation, a pre-cursor to filing with IRS for charitable status. Prepare and adopt Bylaws for the program, which can be done after incorporation. If you haven’t already secured it, apply for and obtain IRS 501(c)(3) tax-exempt status. Remember that this process may be lengthy so speedy action on this item is a must. Apply to the Indiana Department of Education to become a certified Scholarship Granting Organization (SGO). Check with the Department for rules that SGOs must follow to obtain and maintain certification as an SGO. Begin a purposeful recruitment of a diverse governing board. Think of board diversity in every sense, including skill sets and groups they may be affiliated or identify with. Make sure this board won’t conflict with the statutory requirement that members or staff not be in common with (or the spouse of) staff or board members of the schools where scholarship students enroll. Successful SGOs have board members committed to the effort and able to play a valuable role. Identify your mission, create a mission statement, and adopt policies to assure that mission is realized. Research best practices on successful SGO programs. Train your board and any paid staff to make sure policies are carried out successfully and in accordance with IDOE rules, the statute, and suggested best practices. Begin fundraising and marketing to both parents and the donor community. Develop and put in place an adequate accounting process and plan for annual audits (required by law) to track all financial transactions. Apply for credits on behalf of your donors with the Indiana Department of Revenue. Certified SGOs will need to receive the proper forms and procedures from the Department to manage these applications. It is the SGO’s responsibility to apply for the tax credits for its donors’ contributions. Create a process and procedure for application design, administration, and review/approval. Make sure this process makes tracking of students and communication with families as simple and streamlined a process as possible. Establish relationships and policies for working with and making scholarship payments to participating schools on behalf of approved students. For more information and assistance, please contact Lindsey Brown at School Choice Indiana. Scholarship Tax Credit Implementation School Choice Indiana One North Capitol, Ste. 1250 Indianapolis , IN 46204 www.inscholarships.com
Have Questions? With the passage of STC only a month old, a number of questions and issues remain to be resolved in the rulemaking and implementation processes. We would be happy to try and answer your questions and plug you into our regular email updates. Please contact Lindsey Brown at School Choice Indiana for more information.
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