Another option for donors who would like to make a gift to the UW Foundation but need income, especially those with appreciated securities, is the pooled income fund. A pooled income fund is very similar to a mutual fund.
To make such a gift, you sign a pooled income fund agreement and transfer cash or appreciated securities to the fund. Your gift purchases “units” in the fund based on the fair-market value of your gift and the current market value of fund units. Income from the pooled fund is distributed on a pro-rata basis to the beneficiaries you specify. Beneficiaries receive income for life. When the last beneficiary dies, the value of your units in the fund will be distributed to the UW Foundation and benefit any program you choose. You avoid capital-gain tax, if any, in the asset you use to make your gift.
When the last beneficiary dies, the value of your pooled fund units will benefit any UW Foundation program you choose.
How it Works
- Charity creates pooled income fund
- Individual donors make gifts to the fund
- Trustee invests and manages fund
- Trustee makes annual payments to income beneficiaries equal to their proportionate share of the fund
- Donor’s shares transferred to the UW Foundation at death
Benefits
- Income based on the performance of the fund
- Federal income-tax deduction for the charitable remainder value of your gift
- Diversification with numerous gifts pooled for investment purposes
- Gift remainder will provide generous support for the UW Foundation
