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Pooled Income Funds
Alan and Susan had long been involved in charitable activities. They have been volunteers at many recent activities and fund drives, often spending evenings answering phones. The time they spent together helping others was intensely rewarding to them and they often wished they could do more.
Susan: "While we get personal satisfaction out of helping others, there is also some frustration. No matter what we do, there is always more that could be done."
Alan: "It would be wonderful to be able to not only physically pitch in, but also be able to just write a check or set up a trust or create a foundation to solve all these problems. But that's not who we are. We're just everyday folks, not wealthy or rich."
Susan: "One day we were talking with a development officer who was saying they had just received a major gift, thousands of dollars, through a trust some people had set up. I said, 'Boy, I wish I could do that but the legal fees and setup costs would about wipe out what we could give.' She looked to see if I was serious and then said there is a way, called a pooled income fund."
Alan: "So we looked at the literature and then talked some more about it. And she was right, we could do it. We may not be rich, but the feeling we get from knowing what we can do makes us feel rich."
A
Pooled Income Fund, often called "the mutual fund of charitable giving," is one
trust for many donors, rather than one trust for an individual donor. When a donor
makes an irrevocable gift to Cuesta College Foundation, Inc., the donor joins
a "pool" of other donors who commingle their donations (it is an irrevocable gift)
in a pool of investments that is governed by a trust document that Cuesta College
Foundation establishes. Each donor has a proportionate share in the fund.
With a Pooled Income Fund, it is not necessary to create a new trust each time a gift is made. As a result, new contributions (cash and or appreciated securities) can be made. The proportionate share of the fund's annual income is paid to each donor. On the death of the donor or the last income beneficiary, the percentage of the pooled income fund representing the donor's gift is withdrawn by Cuesta College Foundation for its use.
A pooled income fund is an excellent way to make periodic contributions that will build into a sizable gift while avoiding fees and setup complexities. Using appreciated securities as a gift to a pooled income fund enables avoidance of capital gains taxes and the donor receives a charitable deduction for the gift value. The pooled income fund will provide income that will vary based on investment performance.
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Please note, individual financial circumstances will vary. The information on this site does not constitute legal or tax advice. Donor stories and photographs are for purposes of illustration only. As with all tax and estate planning, please consult your attorney or estate specialist. All material is copyrighted and is for viewing purposes only. Use of this site signifies your agreement with the terms of use. The content in this Planned Giving section has been developed for Cuesta College Foundation by Future Focus. Please report any problems to webmaster. Revised: August 1, 2005 11:36.