Pooled income funds are trusts that pool together gifts from many donors, and pay an annual dividend to the donors or someone designated by the donor.
- Receive income for life from your donation.
- The money in your fund is donated to your designated cause after your passing.
- Income varies quarterly depending on the fund’s objectives and performance.
A pooled income fund is a charitable trust that pools the gifts of multiple donors for investment. Donors, or those chosen by donors, receive a proportional share of the trust’s income each quarter. After the income recipient dies, whatever funds are left in the trust are given to the designated Presbyterian church or mission entity selected by the donor.
Income varies quarterly with the trust’s investment performance. Pooled Income Fund “Alpha” seeks to provide high current income, conserving nominal principal. Pooled Income Fund “Omega” seeks to provide a reasonable long-term growth of principal and income.
What are the benefits?
- Income for life of one, two, or more people
- Simplicity of participating in an existing trust
- Residual value of gift supports your church or chosen mission organization
- Potential tax savings from income tax deduction allowed, capital gain avoided, and estate deduction
You and your spouse, both age 70, make a gift of long-term appreciated stock with a value of $10,000 to the pooled income fund Omega. If the pooled income fund earns income at a rate of 2%, the annual income you receive from the Fund will be $200. The charitable portion of your gift will be $6,700. * If your marginal income tax bracket is 25%, you receive a potential tax savings of $1,675. In addition, tax on 100% of the stock’s unrealized capital gain will be avoided.
*Based on calculations at the time of publication and subject to change. The charitable portion of your gift will be determined as of the gift date.