In a Pooled Income Fund, a donor’s irrevocable gift of cash and/or marketable securities is combined with other donors’ gifts and invested by the SAG Foundation. All donors and their designated beneficiaries receive proportionate shares of the fund’s annual net income on a quarterly basis, for their lifetimes. As the fund grows, donors’ earnings increase. A Pooled Income Fund offers a donor a means by which he/she can both lend ongoing support to the SAG Foundation and create an income stream for themselves and their beneficiaries for life. The income amount may vary from year to year and is dependent upon the fund’s performance and each donor’s assigned “units of participation” in the fund. Units of participation are a function of the fair market value of each donor’s gift and the percent of fund shares that gift represents. As is the case with a mutual fund, donors can make multiple contributions to the fund. Upon the death of a donor and/or surviving beneficiary, that donor’s portion of the fund is transferred to the SAG Foundation.
Donors receive an immediate charitable contribution deduction (based on the donor’s and beneficiaries’ ages and the fund’s recent rate of return) for their first and any subsequent gifts to the fund. Contributions to the fund may eliminate or reduce estate taxes and transfers of appreciated securities to the fund will not incur capital gains tax.
Since the fund is not subject to tax on long-term capital gains, the value of its investments is maximized and the rate of return is greater than that which could be achieved by individuals investing in low-yield stocks.