A Pooled Income Fund can best be thought of as a charitable mutual fund. Donors pool assets into a Pooled Income Fund to receive an immediate tax deduction and a lifetime stream of income from the investments within the fund. After the donor passes away the remaining assets are distributed to one or more charitable beneficiaries.
Individual investors with a desire to make a significant donation to charity after their death make ideal donors to a Pooled Income Fund. These individuals likely give during their lifetime in smaller amounts and would like to make a larger gift but they rely on the income from their investments while they are living. This tool is also beneficial to those with a desire to reduce the size of their estate.
While including a charity in your will seems an admirable solution, it is actually a less efficient way to contribute to charity after your death because you do not receive an immediate tax deduction for including a charity in your will. You can actually reduce the cost of your gift, or increase the size of your gift by using planned giving tools like a Pooled Income Fund.
Generally speaking, donors stand to benefit to the greatest degree when making a gift to a Pooled Income Fund when their adjusted gross income is high. Because of the immediate tax deduction, the donor may be able to move into a lower tax bracket during years where they still have high levels of income. This is most common before you retire.
The deduction that you will receive will vary based on your age, and the age of the second income beneficiary if you have one. Contact us for a no obligation estimate.
Annual deduction limits apply.
Deduction will be calculated based on Net Fair Market Value of the property (cash, stock, etc.) transferred.
Pro tip: The tax deduction on new Pooled Income Funds is significantly higher because of an IRS rule mandates the use of the Applicable Federal Rate for new young funds (funds younger than three years).
Our role is two-fold; our team will act as both an informational resource and a connector. The process begins with an informational phone call where we answer your questions about the Pooled Income Fund. Once you decide to take the next step, we will connect you with a licensed professional to discuss implementing a Pooled Income Fund. Thanks to our generous sponsors, we have experience working with a wide range of financial professional all across the country making it easy to refer you to one near you.
No, you can choose any qualified 501(c)3 charity to act as the beneficiary for the Pooled Income Fund.
Before you make a contribution to a Pooled Income Fund you will need to consult with a financial professional that has experience with planned giving. Because this a specialized field, you may find that your financial planner or CPA may not focus on this area. If needed, we are happy to coordinate the implementation of the Pooled Income Fund with your professional advisor.
Email us to be contacted by one of our consultants to learn more today.