Given that the Education Freedom Tax Credit is being implemented for public-school students in 2027, I have started thinking about the essential questions to ask in 2028. For starters, how will we understand the impact of the EFTC? Public-school leaders (and this article series) have moved quickly from asking if public school students can participate, to much more practical questions about things like the role of Scholarship Granting Organizations (SGOs), eligible expenses, donors and implementation. But, before the first donation is made, and way before any scholarships are awarded, I would start thinking about a new question: what are you going to measure? Before anyone gets nervous, I'm not talking about developing a new federal reporting, or compliance, system. Not only is Treasury still in the process of developing the recordkeeping and reporting obligations, but it is likely that those will apply primarily, if not only, to the SGO receiving and distributing funds. Instead, I am talking about something much simpler: namely, figuring out what information would be useful for a district, education foundation or community interested in if their effort and donations actually helped students. For example, suppose scholarships help families pay for tutoring. How many students used them? Was the need and demand for before or after school support greater than the funding made available? How many students participated in a tutoring initiative for the first time? How did parents hear about the opportunity, was there an effective information campaign throughout your district, or only in a handful of schools? Of course, the specifics of what we collect and evaluate would be different depending on the scholarship-use case. Items such as technology, materials, or special-needs services qualify as allowable expenses, but the principle is the same. Leaders need to know what happened. Here in Pennsylvania we have been blessed by a number of state programs, and in my decade of experience working with them, I have noticed a trend. New funding initiatives have a way of becoming qualitative anecdotes before they become quantitative data. Everyone remembers how one family received help or the one donor who made a significant contribution. But then the next year arrives, or staff turns over, and somebody starts to ask if the effort was worth continuing, or even expanding. In that moment, you want to be prepared, instead of scrambling to start reconstructing the numbers.

Eligible students don’t create scholarship dollars. Donors do. That is the next part of the Education Freedom Tax Credit conversation I think public-school leaders need to spend some time with. Over the last few weeks, I have been very clear that public-school students are among those that qualify for these scholarships. I have talked about tutoring and other eligible expenses applicable specifically to public schools. I have even talked about the development of Scholarship Granting Organizations and how families could find them. Nonetheless, the EFTC program could still produce only a few scholarships if donors aren’t encouraged to contribute. The EFTC will only work if enough individual taxpayers make qualified cash contributions to SGOs. As a result, size of the scholarship pool, especially in the next few years as the program begins, is dependent on the number of contributing donors. As a result, engaging with and preparing your community now is essential for both short and long term success. Thankfully, I am happy to see that public-school organizations are starting to recognize this. The School Superintendents Association’s (AASA) current superintendent series has moved beyond the basic question of whether public schools can participate. One session is directed at helping district(s) assess community donor potential, develop model revenue projections and even walk through what donor-relationship strategy means for them. Beyond that, even the Bipartisan Policy Center has built a calculator around essentially the same question: how many participating taxpayers would it take to fund public-school programs at a scale that is impactful? The basic premise is relatively simple: Suppose an SGO serving public-school families in a community wanted to build a $100,000 scholarship pool. At $1,700 per participating taxpayer, reaching that amount would require about 59 maximum-credit contributions. Of course, this is real life, and inevitably, it will be messier. It is likely that the majority of donors may contribute only partial amounts, instead of the full $1,700 that the credit is available for. Scholarship organizations will have their own missions and priorities. Treasury STILL(!) has regulations to finish. But 59 people is easier for most of us to conceptualize, as opposed to only thinking about the $100,000.

A family cannot apply for a scholarship it does not know exists. That may end up being one of the more important facts about the Education Freedom Tax Credit when it begins in 2027. To date, I have spent plenty of time talking about governors, state participation, Scholarship Granting Organizations and Treasury regulations. While these are going to be the people and things that determine whether the program can operate, they don’t determine if a family actually hears about it. For public-school families, that may be the harder part. Let's be honest, most parents are not following IRS notices or waiting for their state to publish an SGO list. Realistically, they probably aren’t even aware if their state has opted in or not. But, I can promise you that they are talking to teachers, counselors, principals, special education staff, and CTE staff. In other words, they are talking to people they trust, who are already running the programs their children attend. That puts public schools in a critical position, and I don’t know if anyone has recognized it yet. Federal law does not limit these scholarships to private-school tuition. Qualified K–12 expenses include costs born by public-school families, and federal guidance has indicated that these scholarships can fund tutoring and support services for students with disabilities. At FundEDU, our current public-school work is built around the same practical point: families can have eligible education costs even when their child has no intention of changing schools. But we also have seen firsthand that just making support available isn’t enough if no one knows about it. With the EFTC, the public school does not need to know, or make a decision about if a specific expense qualifies. Instead, the school's job is much simpler. They just need to know where to send the parent who needs help. If you are a public school leader reading this article, I suggest starting with the following questions: Which SGOs intend to serve families in your community? Who at the district or education foundation keeps that information current? Do counselors know the program exists? Can a parent find one reliable source of information or do they have to try and understand the EFTC from scratch?

One of the fastest ways to make a new funding program harder than it needs to be is to build an organization before deciding what job it actually needs to do. Unfortunately, I think there is a real risk of that happening with the new Education Freedom Tax Credit Scholarship. After months of speaking with leaders, I am starting to notice a trend. School and networks hear about Scholarship Granting Organizations and then immediately start thinking about structure. Should our school or network become one? Do we need a new nonprofit? Who handles the applications? Who owns compliance? Personally, for all of the educators reading this, I would start somewhere else. Start with the students. Under federal law, an SGO has a specific job. It must be an eligible 501(c)(3), must keep qualified federal contributions separate from its other funds and must meet federal scholarship requirements. It has to serve at least ten students who attend two or more different schools and spend at least 90 percent of its income on scholarships. This is not a simple process, and requires real infrastructure and expertise. As such, it may make sense for some established scholarship organizations and education nonprofits to take this task on, but not every school community needs to build their own. Our guidance at FundEDU is much simpler (and saves you time!): consider partnering with an SGO before deciding you need to run one. That comes directly from the work we already do. In Pennsylvania's tax-credit system, FundEDU plays a critical role in making education funding move: donor outreach, lead generation, contribution tracking, documentation, compliance, reporting and follow-up. We help schools understand the opportunity, develop the donor side, and ultimately connect the people involved so students can benefit. This provides another important lesson that I think we can adopt to the EFTC in that schools do not need to duplicate the expertise that makes an organization like ours effective. Instead, schools have the information that we need much more: knowledge of their communities.