POOLED INCOME FUNDS

The pooled income fund is a gift plan, similar to a mutual fund which is actually a trust fund for donors who wish to receive an income that has the possibility of growth through the years. A particularly appealing feature of the plan is that it does not require gifts in the substantially larger amounts that are generally necessary for separate trusts.

Individual gifts of cash and other property are combined or "pooled" and collectively invested by a trustee to produce income that is shared by the contributors. You or your designated beneficiary, not necessarily related to you, will receive a prorated share of the fund's earnings. Additional donations may be added to your fund at any time.

At the death of each contributor's last income beneficiary, the number of units attributable to that beneficiary is severed from the fund and is designated for the Oakland Family Services endowment fund.

Considerations and Benefits for Pooled Income Funds

  • There is an immediate income tax deduction for the charitable remainder value of the gift. If all of the deduction cannot be used in the year of the gift, the excess deduction may be carried forward into subsequent tax years.
  • Capital gains tax on long-term appreciated property is avoided. The income tax deduction is based on the current fair market value of the asset.
  • Estate taxes may be diminished.
  • The fund may be used to provide additional income for the donor or a loved one.
  • Additional contributions may be made to a pooled fund at any time.

Who Might Be Interested in Giving Through Pooled Income Funds?

  • Donors who want a variable, market-driven income but do not have the means or do not wish to contribute an amount large enough to create a charitable remainder unitrust.
  • Younger donors who need to keep some income for life and want a variable market-driven income.
  • Donors who wish to provide a family member, a long-time employee or other beneficiary with additional lifetime or retirement income.
  • Donors with highly appreciated, but low-yield assets who want to increase their income without paying capital gains taxes on the profit.

For more information, call Kristin Benton at (248) 858-7766, ext. 1203, or email at: kbenton@ofsfamily.org.
 
The information presented is for educational purposes and should not be considered as tax or legal advice.┬áDonors should consult with their professional advisors.