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The Federal Scholarship Tax Credit: What You Need to Know The Federal Scholarship Tax Credit Is Moving Forward: What You Need to Know About the Rulemaking Process What many first knew as the Education Credit for Children Act (ECCA) is now more commonly being referred to as the Federal Scholarship Tax Credit (FSTC). While the name may be shifting, the goal remains the same: to expand educational opportunity for students across the country. This new federal credit, created under the 2025 One Big Beautiful Bill (OBBB), will allow taxpayers to support scholarships for K-12 students and receive a dollar-for-dollar credit on their federal taxes. It represents the most significant national step toward expanding educational access in decades. But before the program can launch, it must go through the federal rulemaking process, a required step to define how it will be implemented. What Does “Subject to Federal Rulemaking” Mean? Rulemaking is how agencies turn federal law into operational reality. The law sets the framework, but the rulemaking process determines the details. These details include: How Scholarship Granting Organizations (SGOs) will be certified What reporting and accountability standards will be required How taxpayers will claim the federal credit How funds will reach students and schools Compliance, audit, and transparency requirements The purpose of rulemaking is to ensure that the program runs fairly, consistently, and responsibly across all participating states. Rulemaking Has Officially Begun The U.S. Department of the Treasury and the Internal Revenue Service (IRS) have formally begun drafting the administrative rules for the Federal Scholarship Tax Credit. This process includes: Internal drafting and review Release of proposed rules A public comment period Revisions and finalization This is a lengthy but essential step. It ensures clarity for states, schools, scholarship organizations, and taxpayers. It also prevents confusion and prevents any group from misinterpreting the law. RedefinED Is Actively Involved RedefinED, alongside other leading scholarship and education organizations across the country, is directly collaborating with partners working with the Treasury Department during this process. Our role includes: Helping ensure that the rules reflect the realities schools face Advocating for clear, efficient procedures for donors Encouraging transparency and accountability standards that support trust Making sure the needs of students remain at the center of the process We are not waiting to see how the policy unfolds. We are helping shape its implementation so that it will work effectively for students, families, schools, and donors nationwide. Why This Matters The Federal Scholarship Tax Credit has the potential to reshape access to education in the United States. When implemented well, it can: Expand scholarship access for students who need it most Bring more funding into public and private school educational support programs Reduce financial barriers for families Encourage community partnership and generosity This is a national opportunity, but the benefit will vary based on how well each state participates. The rulemaking process is where clarity and fairness are built in. What Comes Next After Treasury releases proposed rules, the public will be invited to submit comments. This is a powerful opportunity for schools, SGOs, families, and advocacy organizations to make their voices heard. We will keep you informed every step of the way, including: When the proposed rule is released How to provide meaningful public comment State-level updates, including Pennsylvania’s participation decision The potential is enormous. And the work is already underway. This is a pivotal moment for educational access in America. RedefinED is committed to ensuring that families and schools are prepared, informed, and positioned to benefit. More to come soon. Return Home

The new federal tax credit program has one simple truth: with a $1,700 cap per taxpayer, success is not about cultivating just a few high-income donors. Success will come from building a movement of everyday people—parents, alumni, parish members, and community supporters—each giving what they can and knowing it matters. This program is a numbers game, yes. But it is also much more: it is an invitation to deepen relationships, strengthen your school’s community, and create a grassroots engine that can sustain scholarships for years to come. Why focusing only on wealthy donors will fail Many schools instinctively look to their highest-income families when new fundraising opportunities arise. But in this program, that approach is shortsighted. If you only focus on the top of your donor pyramid, your efforts will stall. Why? Because the cap is $1,700. That means a single high-income donor can give no more than a middle-income family. And statistics show that households making between $50,000 and $100,000 actually give a larger share of their income to charity than households in the $100,000 to $250,000 range. The very families you might overlook could become the most reliable and generous supporters when measured proportionally. Share of income: where average-earner donors punch above their weight Multiple analyses confirm that lower and middle-income households give a larger share of their income than the wealthiest. The Chronicle of Philanthropy’s long-running How America Gives report shows this clearly through its “giving-ratio” method, which calculates donations as a share of adjusted gross income. That means a school’s true strength is not in cultivating a handful of major donors but in activating a broad base of regular income earners. This is where trust, storytelling, and stewardship matter most. Building a grassroots movement This program creates an unprecedented opportunity to make fundraising community-driven: Parents and grandparents can redirect part of their taxes to scholarships, making them invested partners in the school’s success. Alumni can give back in a way that feels tangible and personal, funding the very opportunities they once benefited from. Parish members and neighbors can see themselves as part of something bigger, helping families in their community access a life-changing education. Each gift may be modest in isolation, but collectively, they transform what is possible for schools. How to turn $1,700 into a movement Set a clear numeric goal. Break it into the number of donors you need, not just the dollar amount. For example, $1 million raised = 588 donors at the $1,700 cap. Stand up a simple CRM. Track every prospect and donor. Create lists by segment—parents, alumni, parish, local businesses—and make sure every conversation is logged. Be consistent in outreach. Two call blocks a week, one email wave, one story posted to social, one stewardship touch. When your community sees and hears from you consistently, participation grows. Make giving simple. One link. One explainer. One process. The fewer steps, the more donors you will secure. Steward relentlessly. Thank within 24 hours. Share stories that connect the gift to impact. Invite donors to spread the word. Create belonging. The mission comes alive here At RedefinED, we often remind schools that fundraising is not just about dollars, it is about relationships. This federal program is built for that philosophy. It invites you to sit across from families, share your mission, and ask them to be part of something bigger than themselves. Grassroots fundraising does not just raise money. It strengthens your community. It aligns perfectly with the mission of education: bringing people together to invest in the future of children. A numbers game with a heart When you boil it down, here is the formula: One person = up to $1,700. One hundred people = $170,000. One thousand people = $1.7 million. It is not just math. It is a movement. If your school builds this broad, community-first approach, you will raise more than money. You will raise awareness, loyalty, and lasting trust. And that is the true win of this program: not just more scholarships, but a community bound together by the mission to make education accessible to every child. Final word The federal tax credit program is an opportunity to redefine how schools think about advancement. Stop chasing only the wealthy. Start cultivating everyone. When you mobilize hundreds or even thousands of average income donors, your school does not just raise funds, it builds a grassroots movement for students. At RedefinED, this has always been our focus. We have spent years proving that when regular people come together with a shared mission, they can make a huge difference for schools. And now, we have the chance to do it on a scale this country has never seen before. This is more than fundraising. It is a national moment to bring millions of people together around the same mission—families, neighbors, alumni, and communities all choosing to use what they already have to open doors for children. Instead of narrowing our focus to a few wealthy donors, let’s cast the net wide. Let’s invite everyone to the table. Because when we do, we unlock not just dollars, but hope, opportunity, and lasting change for students across America. Return Home

The passage of the Educational Choice for Children Act (ECCA) has opened doors for families and schools across the country. For the first time, individual taxpayers can direct federal tax dollars toward scholarships — creating a brand-new stream of funding that has the potential to reshape private education. But here’s the reality: ECCA is not just about fundraising. Yes, donors matter. Yes, building pipelines of individual givers is essential. But if your school views ECCA strictly through the lens of raising money, you’ll miss the bigger opportunity. The schools that thrive in this new era will be the ones that prepare across fundraising, marketing, and admissions — aligning all three to attract, enroll, and retain more students. 1. Fundraising: Building the Engine At the core of ECCA readiness is the ability to engage individual taxpayers. Unlike corporate tax credit programs, this is about volume and relationships. Hundreds of small- and mid-sized donors, giving year after year, fuel the program. What schools need to do: Develop donor pipelines now. Parents, alumni, parishioners, and community supporters are your base. Educate them. Most people don’t understand how tax credits work. Schools must provide simple, clear resources. Invest in systems. Donor tracking, receipting, and stewardship can’t be handled on spreadsheets anymore. But raising dollars is only step one. To maximize the impact, those dollars must flow seamlessly into enrollment growth. That’s where marketing and admissions come in. 2. Marketing: Owning the Narrative ECCA dollars expand access — but only if families know about them. Parents who’ve never considered private education before will be curious, cautious, and hungry for information. Schools must be ready to meet them with a strong, consistent message. What schools need to do: Update your website. Clear ECCA information should be front and center. Families should see at a glance how scholarships make your school accessible. Build campaigns. Use social media, email, and print to reach your community with targeted messaging. Tell stories. Highlight students whose lives were changed by scholarships. Humanize the impact of choice. Train staff as ambassadors. Every teacher, coach, and administrator should be able to explain ECCA simply and confidently. Marketing is about visibility. If your school isn’t proactive, another school will capture those families first. 3. Admissions: Removing Barriers ECCA will drive more inquiries. But if your admissions process is outdated, slow, or complicated, families will walk away. A scholarship only matters if it translates into enrollment. What schools need to do: Simplify applications. Families new to private education need a clear, welcoming process — not red tape. Respond quickly. Speed matters. A 24–48 hour turnaround on inquiries builds trust. Coordinate with fundraising. Admissions staff should know when scholarship dollars are available and how to connect families to them. Track data. Monitor where inquiries come from, how families move through the funnel, and what roadblocks prevent enrollment. Admissions is where the promise of ECCA becomes real. Without an efficient, family-friendly process, scholarship dollars risk going unused. 4. Integration: The Schools That Win The schools that benefit most from ECCA will not be the ones with the biggest donor list or the flashiest campaign. They will be the schools that integrate fundraising, marketing, and admissions into one strategy. Imagine this cycle: Fundraising brings in ECCA dollars from individual taxpayers. Marketing tells families those dollars are available and makes your school visible in the community. Admissions converts that interest into enrolled students, filling classrooms and strengthening the school’s future. Each part feeds the next. Schools that align all three will grow. Schools that silo them will struggle. 5. The Time to Prepare is Now ECCA officially launches in 2027, but the runway is short. Schools that start preparing today — building donor systems, updating marketing, and modernizing admissions — will be the ones that thrive from day one. Waiting until the law goes live means you’ll already be behind. Donors will be claimed. Families will have chosen. The first-movers will dominate. The Bottom Line ECCA is bigger than fundraising. It’s an opportunity to transform your entire advancement and enrollment model. Schools that treat it as a comprehensive strategy — fundraising + marketing + admissions — will not only unlock new dollars, they’ll grow enrollment, strengthen sustainability, and expand their impact for years to come. At RedefinED, we’ve spent years building the systems schools need to succeed in this exact environment. We’ve proven that when fundraising, marketing, and admissions work together, schools don’t just raise more — they grow more and do more. The schools that are ready will win. The time to prepare is now. Return Home

When it comes to expanding school choice, two major tools often come up in conversation: education vouchers and tax credit scholarships. While they both aim to give families more options in choosing the right school for their child, they work very differently. Understanding the distinction is key—especially with the upcoming Educational Choice for Children Act (ECCA), which will operate as a tax credit program, not a voucher system. What Are Education Vouchers? Education vouchers are direct government-funded certificates that parents can use to pay tuition at private schools instead of public schools. Essentially, a portion of the taxpayer money that would have funded a child’s education in the public system follows that student to the private school of their choice. How vouchers work in practice: Funded directly by the state. Parents receive a set dollar amount toward tuition. Public school dollars are reallocated to private education. While this approach gives families flexibility, it often sparks debates around whether public school funding is being diverted. What Are Tax Credit Scholarships? Tax credit scholarships work differently. Instead of pulling dollars out of the public system, they incentivize private donations by offering tax credits. How tax credits work in practice: Individuals and businesses contribute to scholarship organizations. In return, they receive a percentage of their contribution back as a tax credit. The scholarship organizations then use those funds to provide tuition assistance for families. This model shifts the focus from government spending to private giving, empowering donors to directly support educational opportunities while keeping public school funding intact. Where Does the ECCA Program Fit? The Educational Choice for Children Act (ECCA) is a federal tax credit scholarship program set to launch in 2027. Here’s why that’s important: It’s not a voucher. No federal or state education dollars are being redirected. It’s fueled by private contributions. Donors will receive a tax credit for contributing to scholarship-granting organizations. It expands access. Families who may not have been able to afford private education will gain new opportunities. In short, the ECCA combines the best of both worlds—encouraging private philanthropy while opening doors for students to attend schools that best fit their needs. Why the Distinction Matters Confusion between vouchers and tax credits is common, but the distinction matters because: Policy debates differ. Critics often focus on voucher programs’ impact on public school budgets, while tax credits avoid this tension. Donor involvement increases. Tax credits bring private dollars into education instead of redistributing existing funds. Public perception shifts. Framing ECCA as a tax credit scholarship program helps clarify that it’s about creating opportunities through giving, not cutting public school support. Final Thought The upcoming ECCA program represents one of the most significant expansions of school choice in U.S. history. By leveraging tax credits instead of vouchers, it ensures that families gain access to new educational opportunities while strengthening a culture of giving. At RedefinED, we’re here to help schools prepare for this landmark program—so they can raise more, grow more, and do more for their students. Return Home