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As we know, Catholic schools do far more than teach reading, science, and math. They help our young people grow in the faith, discover their God-given gifts, and learn what it means to live as disciples of Christ.
They help form future parishioners, catechists, ministry members, and parish leaders. They strengthen families, foster vocations, and help build vibrant parish communities.
Investing in Catholic education is not simply an investment in today's students - it is an investment in the future of our parishes, dioceses, and our mission as Church.
And now, there may be another way for people to help make that investment.
Beginning January 1, 2027, a new federal Education Freedom Tax Credit will provide an additional opportunity for individuals to support scholarships for eligible K–12 students through qualifying Scholarship Granting Organizations, or SGOs.
The credit applies to qualifying cash contributions made to eligible SGOs. Those organizations then use the funds to provide scholarships for eligible students. (What does the new regulation propose?) Two important notes: This is not a tax credit for tuition paid directly to a Catholic school or for a donation made directly to your parish or school; and states must choose to participate.
As of September 14, 2026, 30 states have made an advance election to participate for 2027. Other states may still elect to participate. The IRS is maintaining the official list as states complete the process. (Did my state elect to participate?)
So, what can Catholic school leaders do now?
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1. Find out what is happening in your state.
Even if your state has not yet opted in, it is worth paying attention. The landscape is developing, and the IRS will continue to update its list of participating states and eligible SGOs.
2. Learn how the program will work in your state.
Participation alone does not mean every organization or school automatically qualifies. States will identify eligible Scholarship Granting Organizations, and those organizations must meet federal requirements. Understanding how the program will operate - and which organizations may be involved - will be important. (IRS Fact Sheet)
3. Begin thinking about revised communications.
If your state participates, some of your parishioners, school families, alumni, grandparents, and other supporters may have a new way to support Catholic education!
That means school and parish leaders will need to be prepared to explain the opportunity clearly, have some appropriate resources available, and encourage potential donors to consult their own tax advisors about their individual circumstances.
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Suggested Steps to
Start Preparing:
-Update your communications, especially on your website. People should be able to see at a glance how scholarships make your school accessible and how to support them.
-Use social media, email, and print campaigns to reach your community with targeted messaging and useful information.
-Tell stories and highlight students who benefited from scholarships and what that means to them.
-Train staff to explain the benefits of scholarships and how to support them. A simple conversation and clear, available information can make all the difference.
-To help ensure that the program is active and accessible in your home state, encouraging people to write to your governor's office may still be a benefit and have the most direct local impact.
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The IRS currently says the federal credit is up to $1,700 for an individual taxpayer, and there is a proposal to allow a combined credit of up to $3,400 for married couples filing jointly. We will be hearing more in the future when things are finalized.
An Opportunity Worth Watching
Catholic education depends on people who believe that what happens in a classroom is important and well worth making the investment today to shape the Church of tomorrow.
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About Lynch Development Associates:
Lynch Development Associates (LDA) is a Catholic development firm that specializes in assisting dioceses, parishes, schools, and other entities with their development needs. For over three decades, our directors have partnered with clients to raise the necessary funds to construct and renovate buildings, fund new initiatives and research, and build new churches, parish centers, and schools. We have also been successful with annual appeals, debt reduction campaigns, stewardship initiatives, and the establishment of endowments in various communities nationwide. Our firm, having raised over 2 billion dollars, maintains a 98% success rate in meeting or exceeding our goals. Our directors are intimately involved in every aspect of your campaign, enabling us to give clarity to your vision and together, make your dreams a reality.
Annual Appeals, Feasibility Studies, Capital Campaigns, Major Gift Solicitations, Fundraising, Development, Endowment Campaigns, Prospect Research, Spanish Language Programs, Stewardship Initiatives, Offertory Programs, Planned Giving, Strategic Planning
PROUD SPONSOR OF THE ICSC
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