Jewish day schools in Greater Washington granted $25 million in tuition assistance last year to over half of their 2,700 students, but that figure is poised to rise dramatically as a result of a new federal tax-credit initiative that takes effect in January. 

Signed into law last July as part of President Donald Trump’s One Big Beautiful Bill Act, the initiative offers up to a $1,700 income tax break to individuals who donate to Scholarship Granting Organizations supporting K-12 students. To ensure local schools reap the benefits, the Jewish Federation of Greater Washington has rallied local schools to organize early.

“The vast majority of the students who are going to Jewish day schools are receiving tuition assistance because the cost of a day school education is incredibly high,” Joel Frankel, senior director of community capacity at the Washington federation, told eJewishPhilanthropy. “Our goal for this program is to make day school education more accessible to more people.”

Already, 31 states have opted into the tax credit, including Virginia, which was the first state to join in, and the Joint Committee on Taxation estimates the program will lead to $500 million donated to SGOs.

To attain the benefits of the credit, day schools need to prepare well ahead of time, Frankel said, especially since donations cannot be made directly to schools. Instead, the new law states that the nonprofit people donate to must be solely focused on granting scholarships. Therefore, communities need to launch new 501(c)(3) organizations dedicated to offering scholarships, which are then provided to students in schools. In addition, each SGO must support two schools and at least 10 students.

Setting up an SGO is “a legal and financial behemoth in terms of the bureaucracy,” Deborah Skolnick-Einhorn, head of school at Washington’s Milton Gottesman Jewish Day School, told eJP. Milton Gottesman has 480 students, over half of whom receive tuition assistance. Last year, the school granted $5 million in aid, including emergency support for federal workers affected by cuts implemented by the Trump administration. 

To ease the work of setting up SGOs, the federation corralled lay leaders to establish bylaws and organized pro-bono attorneys to fill out paperwork and research policy and regulation. This allowed schools to remain focused on educating students. Just waiting for the nonprofit to be approved by the IRS can take months. 

“It’s been amazing to have that as an in-kind gift to our school community that allows us to keep doing our core work while federation and its partners are collaborating so that we can benefit from this potential, but without diverting our essential resources toward it on a daily basis,” Skolnick-Einhorn said.

There are seven Jewish day schools in Greater Washington — a region which includes the District of Columbia, Maryland and Virginia, referred to as the DMV — so the federation brought schools together as partners, creating an SGO for each state because it’s still unclear if SGOs can provide to schools across state lines. “A huge part of our work was to make sure that we were prepared regardless of what the regulations say,” Frankel said.

In addition to setting up the SGOs, the federation is working to educate the larger Jewish community about the potential of the tax breaks for all of the Jewish DMV.

“As wonderful as every individual school is in the work that we do, our reach is limited, and the federation’s reach is much beyond where we are,” Rabbi Mitchel Malkus, head of school at Maryland’s Charles E. Smith Jewish Day School, told eJP. “If the schools were to do this on their own, it would be seen as just a day school initiative. With the federation involved, it can be seen as a communal opportunity, where families and individuals and households in the DMV can see that they have a role to play in supporting serious Jewish education because that’s a community priority versus a school priority.”

The Charles E. Smith Jewish Day School awards $10 million in tuition assistance to half of his 870 students. Malkus hopes the tax break initiative will allow the school to offer more assistance, making it a viable option for more families.

If half the population of Greater Washington who send their kids to a Jewish day school took advantage of the tax break — “the lowest-hanging fruit” — schools would bring in $500,000, Frankel said. But the federation is hoping to enlist the entirety of the 150,000 Jewish households in the region.

Early awareness will breed success, Frankel said. “Our focus over the next six months and beyond won’t necessarily be to educate school communities, but it’s actually to develop plans to be able to get to the wider and broader audience. That’s how we’re going to be able to make this not a million and a half or $2 million or $3 million to our day schools, but potentially upwards of $10 million.”

Another role the federation plays is in advocating for politicians to join the cause, something the larger Jewish Federations of North America is supporting local federations with, emphasizing that this isn’t simply a private school initiative, but one that can benefit public school children, also. SGOs can use the funds to cover after-school programs, special needs services, transportation, technology and tutoring at public schools.

“We are partnering with federations across the country to encourage governors to opt in so communities can access these resources, opening doors for countless families, connecting more families to Jewish education, and helping more children thrive in school,” Sheila Katz, chief Jewish life officer for Jewish Federations of North America, told eJP.

As the only Jewish day school in Washington, Milton Gottesman Jewish Day School was afforded a unique opportunity to partner with a public charter school that offers a Hebrew immersive program as a way to qualify for Washington’s SGO.

With all the work that the federation and local schools are putting into the initiative, there are concerns that it will be all for naught. Governors need to opt in every year and the next presidential administration could shutter the program. 

“Virginia, in particular, is a purple state,” Philip Blumenthal, vice president for strategic planning and allocations at the Jewish Federation of Greater Washington and former president at Virginia’s Gesher Jewish Day School, told eJP. “We tend to swing back and forth [depending on] which party holds the governor spot. It will be interesting to see if the community can feel like there’s a long-term commitment here.”

Although the program seems like a game changer for day schools, there are no prior policies that set a precedent for how the initiative will play out, he said. The majority of states that have bought into the program are Republican-led and many progressive politicians and advocates believe it will benefit private schools more than public and have therefore turned against it.

But Blumenthal is encouraged to see Democrat-led states joining in also, with New York Gov. Kathy Hochul stating that she planned opt in  earlier this month. “It’s not necessarily a strictly partisan thing. It’s not necessarily that, if you’re Republican, you support this, and if you’re Democrat, you don’t.”

Even if a state does not opt in for 2027, the tax break aspect is a federal program, so even though scholarships may not be able to be offered through the initiative in a state, donors can receive breaks across state lines. This is something the federation is recommending for Washingtonians and Marylanders if their governors don’t join, although it is planning as if they will. For instance, donors in Washington can donate to a Virginia SGO, supporting Virginia day schools, and receive the tax break. 

For Skolnick-Einhorn, it’s not simply about the dollar signs — the program is an opportunity to expand local connections. “There are many people who might not currently be donors, but who have at least a tangential interest or commitment to Jewish education,” she said.

The program allows individuals a free way to invest, and once they do, schools have the opportunity to learn about their needs and interests.

“It’s beyond the money,” she said. “It’s about the relationships that we could make with people whom we learn about through this initiative.”