Colorado Groups Prepared for New Tax-Credit Program

State school organizations have formed new entities to participate in a federal tax-credit initiative.

Updated on Oct. 6, 2026 in Financial Aid

Screen-print poster illustration of a stylized schoolhouse silhouette constructed from metallic blocks, evoking community education funding. — Colorado school organizations are forming new nonprofit entities to leverage a federal tax-credit initiative for local scholarship funding. AI Illustration. Upload story photo >

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Colorado school organizations are launching new nonprofit entities to access a federal tax-credit program starting next year. The initiative allows donors to receive up to $1,700 in tax reimbursements for contributions to scholarship-granting organizations.

Why it matters

The program aims to raise billions for public schools while allowing organizations to redirect existing philanthropic funds. Supporters hope that proving the program benefits public schools will encourage the state to maintain its participation in the coming years.

The federal program offers taxpayers up to $1,700 in reimbursements for donations. Currently, 20 of Colorado's 170 school districts operate foundations that may participate in the scheme.

The players

Denver Public Schools Foundation

This organization serves as a foundational entity for the Denver public school system and is among those creating new nonprofits to access the tax credits.

Five Star Education Foundation

This foundation supports the Adams 12 Five Star district and is currently adapting its structure to align with the new federal tax-credit program.

The details

Local school districts may sign agreements with a statewide scholarship-granting organization to enable local taxpayers to donate directly to their specific community schools. Three major Colorado groups have already begun forming the necessary nonprofit entities to act as the official scholarship-granting organizations for the state.

Colorado must vet and submit a list of approved scholarship-granting organizations to the federal government by December 2026.
The tax-credit scholarship program officially goes into effect on January 1, 2027.
Participation in the program must be renewed by the governor in 2028.

Roadmap

This effort represents a significant push by local educational foundations to leverage federal policy for immediate school funding. It reflects a broader trend of school districts seeking diverse, non-traditional revenue streams to supplement standard state education budgets.

Local taxpayers in districts that sign agreements with scholarship-granting organizations will be able to claim a $1,700 tax reimbursement for their contributions. Residents should monitor their local school district's foundation to see if these tax-advantaged donation options become available next year.

The takeaway

This program provides a new financial mechanism for donors to support public schools while receiving significant tax benefits. However, its long-term viability in Colorado will depend on the gubernatorial decision to renew the state's participation by 2028.