Starting January 1, 2027, an Idaho taxpayer will be able to do something they’ve never been able to do before: direct up to $1,700 of what they already owe in federal taxes straight to the school, program or students they care about most.

That’s the promise of the Federal Scholarship Tax Credit (FSTC), a new provision included in federal tax and spending law. Taxpayers who donate to a scholarship granting organization, or SGO, receive a dollar-for-dollar credit against their federal taxes, up to $1,700. The SGO then awards those donations as scholarships for qualifying educational purposes.

National headlines have focused mostly on what could go wrong with warnings that the credit could balloon into a “cash machine” for private schools, or that school districts might find ways to game the system. The concerns aren’t baseless, and Idahoans should watch closely as the program takes shape. But the coverage so far has largely missed the more interesting story: what this credit could make possible for traditional public schools, public charter schools and the students they serve.

At Bluum, we’ve spent more than a decade as a trusted partner, working to support Idaho’s public charter schools, and we know resources are tight. Idaho has historically ranked at or near the bottom nationally in per-pupil public education funding. The FSTC won’t fix that on its own, but it creates an opportunity that hasn’t previously existed.

It provides a way for employers, taxpayers and educators to invest directly in the communities they care about, at no net cost to them, without asking local governments to raise taxes.

That’s why we’ve created Bluum SGO. We believe the credit should do more than help families cover private school tuition. It can also help school districts and charter schools fund the things they often can’t otherwise afford such as summer programs, tutoring, enrichment, and other supports during or outside the regular school day. This is an opportunity to turn taxpayers into more active investors in education. Done well, it could build a new civic and philanthropic muscle around education in the Gem State.

Here’s how it would work. An Idaho taxpayer who makes a donation to receive the federal credit can tell Bluum SGO which education community they want to support. That could be the school their child or grandchild attends, a specific purpose such as agricultural education, or a particular population of students, such as those with special needs. Bluum then earmarks the donation. When scholarships are awarded, the money supports students in that community.

At scale it could look like employees at a company that hires graduates of the local high school pooling contributions to support students at that school. Young professionals at Micron who don’t have kids yet directing gifts toward STEM programs statewide. Teachers at an eledmentary school could donate, with those dollars ultimately supporting students in their own school, or even their classroom.

And, because the contribution generates a federal tax credit up to $1,700, the taxpayer gets their contribution back at tax time.

There are complexities and eligibility requirements. A donor needs sufficient federal tax liability to take full advantage of the credit. A student’s family income must fall within the program’s eligibility guidelines, though fortunately about 90% of Idaho families qualify. SGOs will set rules around what awards can be used for, whether families choose to send money directly to a school or to another organization to benefit their child’s education.

Strip away the complexity and this is simply a new source of private investment for Idaho students. Not a tax increase or a line item in a government budget. Instead of arguing over how the government should spend tax dollars, Idahoans get to ask a different question — what if we could direct funding toward the students and communities we know best?

We expect the Bluum SGO to start accepting donations on January 1, 2027. If Idaho employers, educators and taxpayers embrace it, we could be generating millions of additional dollars for Idaho students annually within a few years, built by Idaho communities investing in themselves.

Duncan Robb is Executive Director of the Nonprofit Bluum SGO and Terry Ryan is its Board Chair.