How CEN SGO is run to the statute
The federal credit sets ten rules for the organization that receives your donation. Here's each rule, where it comes from, and what CEN does about it.
- 01
Public charity
- What the law requires
- A 501(c)(3) organization that isn't a private foundation.
- What CEN does
- Recognized by the IRS as a 501(c)(3) public charity.
- 02
Separate accounts
- What the law requires
- Credit donations kept in one or more accounts used only for them.
- What CEN does
- Federal credit donations go into dedicated accounts and are never mixed with other money.
- 03
On the state's list
- What the law requires
- Listed by each state that has joined, before it can award scholarships there.
- What CEN does
- We apply to each state's list and keep our listing current every year.
- 04
Breadth
- What the law requires
- Scholarships to 10 or more students who don't all attend the same school.
- What CEN does
- Scholarships go to students at many partner schools in each state.
- 05
90% to scholarships
- What the law requires
- At least 90% of the organization's income spent on scholarships. Income, not just donations.
- What CEN does
- Tracked through the year. Operations are funded within the other 10%.
- 06
Qualified expenses only
- What the law requires
- Scholarships pay only for costs on the Coverdell list in §530(b)(3)(A).
- What CEN does
- Scholarships are applied to tuition and fees at partner schools.
- 07
Priority order
- What the law requires
- Last year's recipients first, then their brothers and sisters.
- What CEN does
- Built into how awards are made.
- 08
No earmarking
- What the law requires
- No donation set aside for a named student.
- What CEN does
- Donors choose a school, never a student. CEN makes every award.
- 09
Income verification
- What the law requires
- Household income and family size checked every year, at or below 300% of area median income.
- What CEN does
- Every family is checked each year. Documents are stored encrypted.
- 10
No self-dealing
- What the law requires
- No scholarship to a disqualified person, under rules like §4946.
- What CEN does
- Awards to CEN's officers, directors, anyone who helps select recipients, donors over $5,000 and 2% of the account, and all their families are screened out, as Treasury's proposed rules define them.
Donor acknowledgments
Every donor gets a written acknowledgment by January 31 with CEN SGO's EIN, the year's total, a unique donor number in the IRS format and any goods or services received. We report each donor's total to the IRS under that number by February 28, so you never share your Social Security number with us. You put the number on Form 8525. (Source: Prop. Reg. §1.25F-4(c))
Reporting and audit
Under Treasury's proposed rules each SGO registers in an IRS portal, reports donations to the IRS each year, sends its audit report to every state that lists it, and attaches an annual certification to its Form 990. The audit is by an independent professional for organizations with more than $500,000 in receipts. CEN SGO's financials are audited every fiscal year. (Source: Prop. Reg. §1.25F-4)
What's still pending from Treasury
- Final regulations. The proposed rules of October 1, 2026 take comments until December 1, 2026.
- Form 8525, the form donors file. The rules name it, but the form isn't out.
- The IRS portal for SGOs opening.
- How donor-advised funds, IRA distributions and the alternative minimum tax interact with the credit. The proposed rules don't address them.
We'll update this page as each one is published.
Questions about compliance? Email compliance@censgo.org.
Last updated October 1, 2026.