Pooled Income Fund
Your GiftTree path: You're considering a lifetime gift in partnership with us > Your planning objective is increased income > Your preference is a variable income payout
The Pooled Income Fund is one of the easiest ways to provide income for yourself or others while also making a generous gift to The Lawrenceville School. The Fund operates like a charitable mutual fund. Your gift of cash or securities is combined for investment purposes with gifts from other donors. Each quarter the Fund pays you your proportional share of its net income. When you or the last of your income beneficiaries dies, your portion of the Fund's principal is removed and used by us for the purpose you designated when you made your gift.
Here are some of the benefits of the Pooled Income Fund:
- If you contribute appreciated securities to the Pooled Income Fund, no capital gains tax is payable.
- You can contribute appreciated but low-yielding assets and put the entire amount of your gift to work earning income for you.
- You will also receive a charitable income tax deduction for your gift to the Fund, based on the fair market value of the assets you contributed minus the present value of the life-income interest you retained.
- You can benefit from the professional investment management of our organization and our advisors.
- Your donation can diversify your portfolio if you are too concentrated in one asset.
- It is easy to join the Pooled Income Fund – a simple transfer agreement that we prepare effects the transaction.
- You can join the Pooled Income Fund with a gift of $10,000 or more. Additional contributions may be made with a gift of or more. The Fund brings the benefits of a life-income gift into reach for many donors.
- We will give you gift credit for the remainder value of your contribution to the Pooled Income Fund – the same amount as your charitable deduction, explained above.
Your quarterly distribution will vary with the Fund's performance. The Fund is invested for income and modest capital appreciation, with preservation of capital in mind.
All payments from the Pooled Income Fund are taxed to you as ordinary income.
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Example* |
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At 65, you are an active volunteer in your community, still play tennis and golf, and invest for long-term growth. The bulk of your portfolio is Westinghouse stock that you acquired during your years with the company, and, although you are concerned that you are too concentrated in this one holding, you are reluctant to pay the capital gains cost of selling and reinvesting. You want to support Lawrenceville with a gift of $50,000. You want to retain the income stream you enjoy from your stocks, so you decide to make a $50,000 contribution to the Pooled Income Fund. You use some of your Westinghouse stock to make the gift. Here is a summary of your income and tax benefits: |
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Donor |
Individual, age 65 |
*This example is based on a factor that changes monthly. Contact our office for a personal illustration based on the latest rates. |
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Amount contributed |
$50,000 |
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Cost basis |
$20,000 |
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Current dividend income |
$1,000 |
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Fund's rate of return |
4% |
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Annual income |
$2,000 (variable) |
Click here to calculate the benefits the Pooled Income Fund would give you. |
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Charitable deduction |
$26,979 |
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Increased annual income |
$1,000 ($2,000 from Fund vs. $1,000 dividend) |
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Capital gain avoided |
$30,000 |
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How Do You Make a Gift to the Pooled Income Fund?
You should consult with an attorney expert in the area of charitable gifts and estate planning. We will provide a draft of the Pooled Income Fund transfer agreement for review by you and your attorney, and will help you transfer cash or securities when you make your gift.
Email us, complete the personal illustration form, or call us at (609) 620-6064 so that we can assist you through every step of the process.
The Lawrenceville School
Office of Planned Giving
2500 Main Street, Hogate Hall or
PO Box 6125
Lawrenceville, NJ 08648
(609) 620-6064 | Fax: (609) 895-2148
E-mail: scushmor@lawrenceville.org
