Timbo District To Explore Non-Profit Organization

At its Sept. 1 meeting, the Timbo School Board voted to form a non-profit entity – A Scholarship Granting Organization – to take advantage of a federal tax credit option becoming available in January.

Scholarship Granting Organizations (SGOs) are independent 501(c)(3) tax-exempt charities established to collect private contributions and disburse educational scholarships to K-12 students. Scholarships awarded by SGOs cover private school tuition, academic tutoring, textbooks, instructional materials, and specialized educational services.

Public schools can offer fee-based specialized courses, STEM labs, or Career and Technical Education certification payable via SGO student scholarships. They can also establish approved SGO-reimbursable tutoring, summer school and academic intervention programs for enrolled students.

Under statutory guidelines, SGOs must allocate at least 90 percent of raised tax-credit funds directly toward student scholarships, with overhead capped at 10 percent.

Individual and corporate donors receive a 100 percent tax credit against state income tax liability for contributions made to approved Arkansas SGOs. Individual taxpayers may claim up to a $1,700 nonrefundable dollar-for-dollar federal tax credit annually.

In a statement received after the print issue was published, Supt. Valorie McCleary clarified that the district's role in the non-profit will be limited to assisting with its formation.  The SGO could then  supplement programs at the school, such as Career and Technical  Education, as well as the School of Conservation, in which the district partners with the Arkansas Game & Fish Commission.

"Timbo School District is excited to explore the development of a nonprofit Scholarship Granting Organization that can connect community generosity with meaningful opportunities for students and families," she said.  "For a small rural district, the SGO model has the potential to create a sustainable new source of support for educational programs, career pathways, student services, and other opportunities that might otherwise be beyond our reach. We are interested in working with partners to establish the organization correctly, build strong governance and financial accountability, and create an SGO that can serve Timbo students well."