Pooled Income Fund

A pooled income fund is an irrevocable trust maintained by a public charity. Gifts from all donors are combined for investment purposes. Pooled income funds permit irrevocable gifts from multiple donors and provide income streams to beneficiaries. Donors will all benefit from current income tax deductions for direct contributions to the pooled income fund, as well as transfer tax deductions.

Irrevocable gifts from separate donors are commingled for investment purposes. Gifts are typically cash or securities, although some pooled income funds may accept other types of property. Each named beneficiary receives a proportionate share of the net income earned by the fund each year. Upon each donor’s death, a portion of the fund representing the value assigned to that beneficiary is distributed to the charitable organization that sponsors the fund.

Benefits of Pooled Income Funds

Reduced Tax Costs

Contributing appreciated assets to a pooled income fund reduces or helps avoid taxes by providing income and transfer tax deductions at the time of contribution.

Charitable Impact and Legacy

A pooled income fund creates giving opportunities for modest investors, and allows them to designate the use of the funds by a charitable organization after expiration of the income interest.

Quiz: Find Your Fit

Is a Pooled Income Fund Right for You?

A pooled income fund may be the right tool for donors who have a desire to benefit charity, but may only have a modest investment to contribute. Donors to a pooled income fund must recognize that there can be fluctuations in the net income of the fund.

Our Find Your Fit Questionnaire can help you discover if a pooled income fund is right for you. Click the button below to fill out the questionnaire, or keep reading for more helpful information.

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