Giving spurred by new tax credit can go wherever donors see a good cause
A potentially huge new stream of money seems headed toward American schoolchildren — scholarships funded by private donors who are spurred on by a new federal tax credit.
Critics, including Gov. Tony Evers, have falsely suggested the program amounts to “vouchers” merely for private schools.
Public school district leaders beg to differ — and are thinking about what scholarships will do for their students as well.
“It will help,” said New Berlin School District Superintendent Joe Garza, with, for example, the district’s extensive tutoring effort or its array of co-curricular clubs. “At the end of the day, there’s going to be dollars available to us.”
The dollar-for-dollar tax credit for donations to nonprofit organizations helping schoolchildren will be available to taxpayers in all states, including Wisconsin, starting next year. But donations can only go to nonprofits in states that opt into the program.
Evers said last September that Wisconsin wouldn’t take part, stating the program would be “catastrophic” for public schools.
In truth, the 2025 law states that nonprofit “scholarship granting organizations,” or SGOs, can help students in any kind of school, including public schools, so long as the aid is for any of a specified list of schooling expenses for those children.
Which would not be catastrophic, say school district leaders. Quite the contrary.
“It would be lovely if we had the opportunity on a local level to say to our community members or potential donors, ‘Hey, if you give more, you get all of that money back on your federal taxes,’” said Kim Amidzich, superintendent of the Greendale School District. “So it’s like free for you to give us the money. You just get to decide where your tax dollars go.”
Garza faulted media coverage of the tax credit. “The media seems to have a misinterpretation that this is only available for charter and private schools, and not necessarily for public schools,” he said, calling that “one of the first barriers we have to break.”
Under the law, taxpayers donate to nonprofits that, in turn, help children cover costs such as tuition, textbooks, tutoring, transportation and technology.
Students at private schools could use the money for tuition, among other things. Students at tuition-free public schools would benefit in many ways as well.
Garza pointed to New Berlin’s extensive system of “interventions” — from pulling struggling children in small groups for added help or “a heavier does of high-level tutoring.” That takes money above what ordinary classroom instruction does, and donors could help.
Scholarships in public school could also fund involvement, for instance, in career-exploration clubs such as DECA for business and HOSA for health careers. “We’re close to 80 percent participation in co-curriculars,” said Garza, “so we’re not talking about a small group of kids.”
“If we can help offset those costs (with private dollars), why wouldn’t we?”
Amidzich cited a classic: field trips. Close to a quarter of the high school’s students take part in the marching band, for 20 straight years the state champions in their division. This year, the band traveled to the Rose Bowl parade. In 2023, it was the Thanksgiving Day parade in New York. London’s planned for 2028. The orchestra and choirs travel, too.
“We have our STEM, our robotics team. If they make (national championships), which has happened twice in the last five years, they’ll travel to Houston, New York, wherever it’s being held,” she said.
“It is an amazing opportunity for kids,” said Amidzich, but pricey. If an enlarged donor base chipped in, it would ease pressure on taxpayers.
What she and Garza see as uses for donations spurred by the credit are cited by national observers, too.
Education finance expert Marguerite Roza suggested that donor-funded scholarships could be used to cover extra support for foster children in public schools or to cover advanced placement exam fees. Or they could be used to fund beyond-the-classroom services, such as field trips, drop-in math help, or mental health services.
“That’s what we think will happens,” said Roza, who heads Georgetown University’s Edunomics Lab, to a webinar in June.
It only can happen in states where the governor opts in to the program, but “with this much money at stake, most states will opt in,” said Roza.
All of it also depends on the willingness of nonprofits to set up scholarship granting organizations.
Outside a few guardrails limiting overhead costs and preventing donor earmarks for individual children, SGOs are free to pick a purpose, said Roza. Some could focus on math tutoring or after-school care. Others could pick a particular subject across different school types — helping rural students’ music education, for example.
Some could focus on a particular set of schools: Independent foundations in both New Berlin and Greendale already help their districts. The latter, for instance, already supports an initiative called “KidBoosters,” chipping in to cover some costs for children from low-income families — “like prom tickets,” said Amidzich, “or taking a college-level course that, even if it’s discounted, still costs money. Or that they might need help with hats or gloves or coats that are reliable.”
The credit, Amidzich pointed out, expands the number of people who can give.
“I’m not going to have 100 percent participation; I still have 35 percent of my students coming to school and receiving free or reduced lunch,” she said. “But I certainly have people in this community that will rise to the occasion because they believe in our schools. And I have people outside of this community, grandmas and grandpas, whose grandchildren attend this district. It’ll be like, “Sure, I’ll write a check.”
That is, if the next governor says yes.
Whatever the use of the money, the decision lies with the scholarship granting organization that decides money will follow students for a specific purpose. The dollars don’t simply land in a district’s general operating budget.
SGO preparation is already under way. If the state opts in, the Catholic Archdiocese of Milwaukee “is prepared to support a scholarship granting organization that can support Catholic schools across Wisconsin,” a spokeswoman told the Badger Institute. The Metropolitan Milwaukee Association of Commerce, a nonpartisan business group, is preparing to set up an SGO when Wisconsin opts in, said president Dale Kooyenga — one that he sees as supporting needy children across a range of schools.
He says critics are wrong to think the program offers nothing to public schools. “There’s no public school in the state that has everything they want,” he said. “Not one.” And, he says, potential donors know that.
How much money will go where is unknown, in part because no one knows how many taxpayers will donate. The novel nature of the credit — taxpayers’ donations will be covered, dollar for dollar, by a reduction in federal tax liability up to $1,700 — means that even taxpayers with modest incomes will often have the means to redirect money from the government to SGOs and children.
It also means that the new money for education isn’t distributed by any decisionmaker in Washington or Madison or by school district leaders but by individual decisions of taxpayers to choose to donate to one particular SGO over another, one kind of school and not another.
It means schools will have to demonstrate to donors that their money will be used well, said Garza. “We’re going to do our due diligence to campaign for these dollars,” he said.
But Wisconsin taxpayers will be able to donate to Wisconsin schools, public or private, only if the state opts in. Garza wants to see that happen.
“Give us that opportunity to be creative as needed,” he said, the chance to give “students and families the same opportunity that’s going to be given in all these other states that have already opted in. I’m not sure why we wouldn’t do that.”
Patrick McIlheran is executive editor at the Badger Institute.
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