Scholarship Granting Organization

What is a “Scholarship Granting Organization or SGO? 

Under this bill, a scholarship granting organization is a 501(c)(3) nonprofit organization that complies with the requirements of the Partners in Education Tax Credit Scholarship Program . Great Plains Education Foundation is the SGO for South Dakota Partners in Education Tax Credit Scholarship Program. 

What does an SGO (Scholarship Granting Organization) do?

The statute says…

  • Notify the division (Division of Insurance in the South Dakota Department of Labor and Regulation) of its intent to provide educational scholarships to eligible students attending qualifying schools.
  • Demonstrate to the division that it has been granted exemption from the federal income tax pursuant to section 501(c)(3) of the Internal Revenue Code
  • Distribute periodic scholarship payments from the educational scholarship fund account as checks made out to an eligible student’s parent and mailed to the qualifying school where the eligible student is enrolled. The parent shall endorse the check before it may be deposited.
  • Annually collect written documentation from each qualifying school that accepts educational scholarship payments, verifying the school is accredited by the Department of Education.
  • Provide a division approved receipt to (Insurance) companies for contributions made to the scholarship granting organization.
  • Ensure that at least ninety percent of its revenue from contributions is spent on educational scholarships, and that all revenue from interest or investments is spent on scholarships.
  • Carry forward no more than twenty-five percent of its revenue from contributions in the educational scholarship fund account from the fiscal year in which they were received to the next fiscal year.
  • Submit to the division the names and addresses of all board members and documentation validating that criminal background checks have been conducted on all of its employees and board members, and exclude any employee or board member from employment or governance who might reasonably pose a risk to the appropriate use of contributed funds.
  • Ensure that scholarships are portable during the school year and can be used at any qualifying school to which the scholarship granting organization grants scholarships and that accepts the eligible student according to a parent’s wishes. If a student moves to a new qualifying school during a school year, the scholarship amount may be prorated.
  • Report to the division by December first of each year the following information prepared by a certified public accountant regarding its contributions in the previous fiscal year:
    • The name and address of each contributing company
    • The total number and total dollar amount of contributions received
    • The total number and total dollar amount of educational scholarships awarded to eligible students, the total number and total dollar amount of educational scholarships awarded to low-income eligible students, and the percentage of first-time recipients of educational scholarships who were enrolled in a public school in the prior school year.

Additionally the SGO will…

  • Educates the public about the SD Partners in Education – Tax Credit Scholarship opportunities for students and businesses
  • Provides the public with an annual report on the success of the program