Scholarship Giving Organization
Our Scholarship Granting Organization allows our donors to make gifts to our students who are most in need.
Scholarships are critical to Independence Academy’s mission to prepare and motivate students to become balanced, confident, and resourceful lifelong learners. Donating to Independence Academy’s SGO scholarship fund is a direct way to impact Independence Academy students, and it provides significant tax benefits for Indiana donors.
Our partnership is with Sagamore Institute, a secure tier 1 scholarship granting organization SGO. These SGO scholarships are given to families who qualify for financial need based on an income threshold. So, the money is only going to families needing financial assistance who need a specialized school like ours. Indiana donors receive a state tax credit of up to 50% of their scholarship donation. Donations also qualify as a charitable deduction on federal tax returns.
Your Triple Tax Benefit
Under the current rules, on your state tax return, you receive a 50 percent Indiana state income tax credit. In addition, on your federal tax return, you qualify for a charitable tax deduction for the contribution amount minus the state credit. But let's take it one step further. Through the SGO program, you can gift appreciated stock, creating a triple-threat tax savings strategy.
For example, let's assume you gifted $10,000 of appreciated stock with a cost basis of $4,000. Here's how it works:
$5,000 Indiana income tax credit
50% of $10,000 = $5,000
$1,428 in long-term capital gains savings from stock gift
$6,000 of unrealized gains x 23.8% (includes Net Investment Income Tax) = $1,428
$1,850 of federal tax savings, assuming you are in the highest tax bracket of 37 percent
$5,000 ($10,000 reduced by $5,000 state credit) x 0.37% = $1,850
$8,278 Total maximum savings = $8,278
As you can see, a $10,000 gift to a qualified SGO, which will be used in funding financial aid scholarships for income-eligible families, would ultimately cost only $1,722. Thank you, Indiana Department of Education!
Here are some quick facts on Indiana’s Tax Credit Scholarship program:
There is not a maximum or minimum contribution requirement. However, the tax credit amount cannot exceed the state tax liability for the current year. On July 1, 2022, Indiana allocated more than $18 million in tax credits for SGOs to offer individuals or businesses as an incentive to help raise funds for scholarships. The amount of tax credits still available is listed here.
Our students must meet certain family income levels to qualify for an SGO scholarship.
Actual after-tax cost will vary based on individual income tax status.
Scholarship donors can carryover unused tax credits for up to nine years.
Donors who are interested in taking advantage of this tax savings opportunity should complete the online form at the bottom of this page, whereby Sagamore Institute will designate the donation to go directly to The Independence Academy.
The Independence Academy recommends consulting a tax or financial advisor to learn how a gift made through SGO will benefit you. When filing an Indiana return, the tax credit should be reported as a School Scholarship Credit and must include Schedule IN-OCC 55629. If a donor possesses unused school scholarship tax credits after filing a state return, the donor may carry the unused tax credits forward to be applied to subsequent annual filings for up to nine years.
To make donating as easy as possible, Sagamore Institute provides the following options:
Donate securely online with your credit card.
Download this donation form to mail a check. (Please note Independence Academy in the memo line.)
Make a donation of stock or securities. (Please notify Todd Root, Troot@iaindiana.org, at the Independence Academy Advancement office if you plan to make a gift of stock so that we may ensure your gift is credited correctly to the school’s scholarship fund.)
(1) The net federal deduction is equal to the contribution less the state tax credit as state taxes are deductible for federal income tax purposes.
(2) Actual after tax cost will vary based on your individual income tax status. The Indiana credit cannot be carried back to prior years but can be carried forward for nine years. Consult your tax advisor to verify your ability to utilize the state tax credit and federal tax deduction.
*Please consult your tax advisor for your specific situation. Your gift to an SGO is tax-deductible to the full extent of the federal charitable tax laws.
