State approves The Lutheran SGO of Indiana

Making the dream of a Lutheran education a reality for Indiana families with scholarships and a significant state tax incentive.The state recently approved the creation of The Lutheran Scholarship Granting Organization (SGO) of Indiana. The Lutheran SGO of Indiana exists to raise funds from individuals and businesses to provide scholarship funds to all eligible students wanting to attend an Indiana Lutheran school. The organization will work hard so that all eligible families in Indiana have the opportunity to enroll their children in the Lutheran school of their choice. “The Lutheran schools in northeast Indiana have labored for 175 years to make quality, Christ-centered education affordable and available,” explains Randy Kammeyer, attorney with Hawk, Haynie, Kammeyer, & Chickedantz and board president for the The Lutheran SGO of Indiana. “And now, The Lutheran Scholarship Granting Organization of Indiana is striving to provide families with funds that will enable them to provide their children with a high-quality, Christian education. With contributions to The Lutheran Scholarship Granting Organization of Indiana, donors can help fund scholarships—and receive a special state tax benefit.” To start, The Lutheran SGO of Indiana will focus on scholarships for families in northeast Indiana, but will expand to all Lutheran schools in Indiana.Scholarship granting organizations provide scholarships to low- and middle-income families to help them afford the school of their choice. SGOs were enacted in 2009, but were expanded as part of the 2011 Choice Bill that features a 50-percent state tax credit for contributions made to these SGOs. The funds donated can then be distributed for families that meet the income and other requirements. SGO scholarships are funded by charitable donations, not the state. “Unlike a tax deduction,” adds Kammeyer, “where your charitable donation can be deducted from your taxable income, a credit can directly reduce your tax liability ‘off the bottom line.” Corporations, partnerships, LLCs, PCs, self-employed, or individual taxpayers are eligible for the tax credit. In fact, any entity with a state tax liability can receive the benefit from a donation to our SGO.”There is a $5 million per-fiscal-year cap on available state tax credits for up to $10 million in donations across the state. There are no limits on the size of contributions eligible per entity or individual; you or your business could donate $5 or $5,000,000, depending on the remaining tax credits available statewide. “Think of the process as a ‘first donations in, first tax credits awarded’ process,” notes Kammeyer. “And gifts to our SGO are tax-deductible to the full extent of the charitable laws just like other charitable gifts, including federal tax deductions.”For example, a donation of $10,000 to the Lutheran SGO for an SGO scholarship could result in the following benefits for a donor in a 25-percent tax bracket: $5,000 tax credit from your Indiana state tax due. $2,500 deduction from your federal tax due. Net out-of-pocket cost for that $10,000 gift: $2,500. Knowing that you made possible scholarships for students to receive a Christ-centered education.For clarification, Indiana school vouchers provide scholarships to eligible students by using a portion of the state funds allocated for that child to follow them to the non-public school of their choice, and family income must fall below 150 percent of the federal free and reduced lunch maximums. In contrast, SGO scholarships are not funded by the state, but instead by charitable donations. Family income must also fall below 200 percent of the federal free and reduced lunch levels for SGO scholarships. There are other detailed differences between vouchers and SGO scholarships, but these listed above are the highlights. The Lutheran SGO of Indiana will also host a presentation on SGOs for professional advisers, including attorneys, CPAs, and financial planners, to better understand the impact an SGO gift can make on a client's financial planning. The session will be Wednesday, November 15, from noon until 1:30 p.m., at the Parkview Field conference room in Fort Wayne. There will be free parking in the Silver Lot. A complimentary lunch will be provided, and CE credits will be available.For more information—including the needed donation form, family application, downloadable brochure, FAQs, state statutes, and links to remaining state tax credits available—or to sign up for the November 15 session, please visit LutheranSGO.org, call (260) 312-3289, or email info@LutheranSGO.org.