Pooled Income Fund

Alan and Susan had long been involved in charitable activities. They were volunteers at many recent annual fund drives, spending evenings helping with phone calls. The time they have 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."

Alan and SusanSusan: "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.' He 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 he 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 the Saint Joseph's College Pooled Income Fund to benefit Saint Joseph's College, 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 the charity 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of the donor or the last income beneficiary, the percentage of the pooled income fund representing the donor's gift is withdrawn by the charity for its use.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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For more information or a confidential discussion of your charitable options, please email or call the Vice President and Chief Advancement Officer, Joanne Bean, at 207-893-7891.

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