Oklahoma is the only state in the country that allows taxpayers to earmark part of their state income taxes for public and private schools — but some say schools are missing out on tens of millions of dollars because few people know it’s an option.
LaunchOK is a Tulsa-based nonprofit that encourages students to pursue STEM and aerospace careers. It is one of three education improvement grant organizations that uses donations to fund new initiatives outside typical public school curriculum — then gives income tax credits to donors.
“This is the only tax credit that actually goes straight into a seat in a classroom,” said Sarah Guardiola, CEO of LaunchOK. “It allows parents who are actively in the public school to redirect tax dollars and choose where it goes to expand access for their own kiddos.”
The Oklahoma Equal Opportunity Education Scholarship Act was passed in 2011. It created scholarship granting organizations to help families afford private school through scholarships and education improvement grant organizations to fund new innovative public school programs.
The state legislature has revised the law several times to expand the program and its caps on tax credits and donations. As of 2021, each type of granting organization can give out $25 million in credits per tax year, and any school district can receive funding through these organizations, though no single district can receive more than $200,000 a year.
“I would wager that the vast majority of families in the state who might be able to take advantage of it have no idea that it even exists,” said Dan Hamlin, Oklahoma secretary of education.
A complex state law and limited marketing budgets make getting the word out and engaging donors difficult, according to LaunchOK.
Since taking office this fall, Hamlin says he’s been working to make grant organizations more accessible and impactful in Oklahoma.
Here’s how it works: Oklahomans may donate to eligible organizations by Dec. 31. Organizations process the money and award dollars to schools or scholarships identified by the donor. Then donors receive credits or deductions they can apply come April to reduce the amount of taxes they owe dollar-for-dollar.
If a taxpayer or business commits to a one-year donation, they receive 50% back in tax credits. If they commit to two, they receive 75%. Individual taxpayers can receive up to $1,000 in tax credits and joint filers can receive up to $2,000.
“They can actually take what’s coming out of their hard earned pocket anyway, redirect it, and that becomes a tax credit,” said Valerie Phillips, a consultant with LaunchOK. “They can do that throughout the year, every two weeks on their payday or once a month on their payday… it’s not really coming up with $1,000 in December.”
Businesses are capped at $100,000 in tax credits but can treat the donation as a necessary business expense when filing their taxes.
It’s this incentive that interests Secretary Hamlin. He sees a future where businesses can create funds for the “startup costs” of internships or apprenticeships. Then grants could fund tools or workwear for public school students in these programs, eliminating a barrier to participation.
“That could be a win-win,” Hamlin said. “The company that’s hosting the apprentice is getting a tax credit, but also providing the funds for their own apprentices.”
There is no shortage of education nonprofits across Oklahoma with major funding potential, but very few have registered as grant organizations with the state tax commission. One major hurdle, LaunchOK says, is having the tax know-how to comply with state law.
“It’s hard to do,” Guardiola said. “The compliance and the regulatory overhead and oversight, (but) it’s needed, it absolutely is needed, because you don’t want it to be abused or taken advantage of.”
News decisions at the Tulsa Flyer are made independently of our board members and financial supporters. Read more about our editorial independence policy here.
