Frequently Asked Questions:
Q: What is an SGO and what does it do?
A: SGOs are nonprofit organizations formed to grant scholarships to children who are enrolling in a tuition-based, accredited school. The students must meet certain eligibility and income requirements.
Q: Can I designate my gift for a particular student?
A: No, the law doesn’t allow that. The SGO processes and awards scholarship applications on a first-come/first-served basis to eligible students.
Q: Can I designate my donation for a particular school?
A: Yes, that is allowed. Liberty Christian School has a relationship with Scholarships for Education Choice, an SGO run by the Sagamore Institute, based in Indianapolis. The SGO manages designated scholarship funds for us and processes the paperwork so that donors receive their tax credits from the Indiana Department of Revenue.
Q: How does giving money to the SGO help Liberty?
A: In keeping with its purpose to equip as many students as possible to impact the world for Christ, Liberty often admits students whose families require some assistance in meeting tuition costs. Additionally, the amounts paid to Liberty by the state under the School Choice (“voucher”) program do not fully cover costs. SGO scholarships bridge the gap and provide to Liberty the funds to continue providing an excellent education based on biblical truth.
Q: Does the school receive the entire donation?
A: No. The state allows Scholarships for Education Choice (the SGO) to use up to 10% of donations to fund administrative costs associated with running the program. Scholarships for Education Choice is required to award 100% of any earnings from any scholarship funds it holds.
Q: Is there a cap on the tax credits available?
A: Yes. The state has allocated $9.5 million per year in available tax credits. This cap resets on July 1 each year.
Q: Is there a limit on the tax credit amount I can receive?
A: No, as long as the donation doesn’t exceed the available credits under the annual state allocation cap.
Q: What happens if I submit my donation and then find out that the tax credit has been used up?
A: The SGO will contact you and give you the opportunity to rescind the gift.
Q: Do I have to use the tax credit this year, or can I carry it over to a subsequent year?
A: As of 2013, you MAY carry over tax credits into subsequent years. You no longer have to wait and see what your state tax liability might be before donating. You can give now, and, if your credit is more than your tax bill, you can simply carry the credit over.
Q: Is the tax credit program only available to individuals or can corporations participate, too?
A: Either individuals or corporations can make donations and receive the tax credit.
Q: How can I or my company make a donation to the scholarship fund?
A: Complete a simple form that we will provide and mail it along with a check to Sagamore Institute. Upon receipt, Scholarships for Education Choice will work with the Indiana Department of Revenue to secure and reserve your tax credit. The Indiana DOR will provide Scholarships for Education Choice with a certification number that they’ll send to you, along with a letter you can use when filing federal and state taxes.
Q: Can I give stocks or mutual funds?
A: Absolutely; in fact, you can save capital gains taxes by doing so (contact Liberty for more information). Scholarships for Education Choice has set up a single charity fund with the National Christian Foundation (NCF) for this purpose. NCF will immediately liquidate the securities donated and your tax credit will be based upon the liquidated value, minus the transaction fee.
Note: Liberty Christian School is not engaged in the practice of providing tax advice and this information does not constitute and is not a substitute for tax advice. Liberty Christian School recommends you secure the advice of competent tax advisors with respect to your personal tax situation.