Pooled Income Funds
A pooled income fund is very similar to a charitable remainder mutual fund. With a pooled income fund, a trust is established at a public charity and donor contributions are comingled or "pooled" together, and then invested within the fund. The donors are assigned "participation units" based on the amount of their donation.

Why "Participation Units?"
The investment income generated each year is distributed out to all of the active donors or those that own "participation units." If more donations are added to the pooled income fund, then the donor receives more "participation units." When the donor dies, their "participation units" are dissolved and the principal then goes to the charity.

Tax Deduction?
Donors can transfer highly appreciated securities to the pooled fund as well to avoid the capital gains tax. Contributions pooled to income funds qualify for charitable income, gift and estate tax deduction purposes. The remaining interest is discounted to the present value to determine the donor's deduction amount.



Private Foundations

Related Articles
  1. Retirement

    Guiding Clients on Charitable Remainder Trusts

    Clients who wish to make donations to charity can reap an enormous tax deduction with charitable remainder trusts, but it must be set up correctly.
  2. Investing

    Putting Your Money to Work for the Greater Good

    There are several ways to put your capital to work for social or charitable causes, while also facilitating moves that support your personal finance goals.
  3. Investing

    Should You Wade Into The Dark Pools Of Liquidity?

    Dark pools of liquidity allow big investors to trade away from the public eye. They limit market impact but may leave small investors in the cold.
  4. Insurance

    Using Life Insurance To Make Charitable Donations

    Your life insurance policy can be a great tool for charitable giving. Find out how.
  5. Insights

    Should You Be Afraid Of Dark Pool Liquidity?

    Don't fear the deep end. Dark pool liquidity can help drive down stock cost for everyday investors.
  6. Personal Finance

    Dark Pools: The SEC Is Moving to Tighten Oversight

    The agency is concerned that dark pools' lack of transparency could disrupt the markets
  7. Investing

    An Introduction To Dark Pools

    Dark pools are private exchanges for trading large chunks of securities that are not accessible to the public.
  8. Financial Advisor

    Charitable Giving: How to Help Clients Do More

    The use of donor-advised funds is on the rise, but advisors could be doing more to engage their philanthropic clients. Here are some talking points.
  9. Managing Wealth

    529 Plans: How Much Do You Really Need to Save?

    529 Plans are a popular way to save for college. Here's how to be strategic about how to fund them, depending on your children and their expectations.
  10. Financial Advisor

    Matching Your Charitable Program to Your Goals

    Private foundations have been the gold standard for individuals and families wanting to establish significant charitable giving programs.
Frequently Asked Questions
  1. Depreciation Can Shield Taxes, Bolster Cash Flow

    Depreciation can be used as a tax-deductible expense to reduce tax costs, bolstering cash flow
  2. What schools did Warren Buffett attend on his way to getting his science and economics degrees?

    Learn how Warren Buffett became so successful through his attendance at multiple prestigious schools and his real-world experiences.
  3. How many attempts at each CFA exam is a candidate permitted?

    The CFA Institute allows an individual an unlimited amount of attempts at each examination.Although you can attempt the examination ...
  4. What's the average salary of a market research analyst?

    Learn about average stock market analyst salaries in the U.S. and different factors that affect salaries and overall levels ...
Trading Center