Pooled Income Fund

A trust set up by the Acoustical Society Foundation allowing contributions of cash or other liquid assets, including those that have appreciated over time. A pooled income fund allows commingling of irrevocable donations from many separate donors for investment purposes. Each donor is an income beneficiary and receives a proportionate share of the net income earned by the fund each year, paid on a quarterly basis. Upon the death of a beneficiary, a portion of the pooled income fund, representing the value of the units assigned to that beneficiary, is distributed to the Acoustical Society Foundation general endowment. Minimum initial contribution is $5,000.

Advantages:
- A portion of the contribution is tax deductible
- For appreciated properties, such as stocks or collectibles, all capital gains taxes are avoided.
- Contributor receives income for the rest of their life.
- If an asset is donated that currently yields little or no income, such as a growth stock, income on the asset will increase as part of the pooled income fund.

AN EXAMPLE OF A POOLED INCOME GIFT

Scenario: This example was inspired by a recent gift to the Foundation, but the names and amounts are fictitious. Deborah and Ken are a professional couple in their late 60s who had been together for many years. Deborah, a researcher, is a long-time member of the Acoustical Society, and Ken is an accountant. Deborah had invested wisely, and decided to donate stock to the Foundation currently valued at $14,000. Still desirous of obtaining personal income from her gift, she designated it to the Foundation Pooled Income Fund.
Benefits: This Fund pays Deborah an annual return for the rest of her life of approximately $1,000, depending on market conditions.

- Deborah gets an immediate charitable deduction of about $5,425.
- Deborah avoids capital gains tax on the appreciated amount of her donation. With a combined state and federal income tax bracket of 35%, depending on her cost basis, this deduction will produce immediate tax savings of about $1,900.
- The Acoustical Society endowment receives a proportionate residual amount of the current value of the original donation upon Deborah’s death, and Deborah has helped ensure the Society’s future vitality and diversity of programs.

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