Pooled Income Fund
The University Foundation Pooled Income Fund functions like a mutual fund. Gifts of $5,000 or more to the University Foundation’s pooled income fund are invested with gifts of other donors, and the income earned each year is shared among the participants. Additional gifts of $1,000 or more may be made at any time. The return is not fixed; it fluctuates with the fund’s overall performance. At the participant’s or beneficiary’s death, UNH receives the value of the shares in the fund, which may be used for general purposes or for a purpose the donor has specified.
Assets contributed to the Pooled Income Fund may include cash or marketable securities. No capital gains are incurred on the transfer of appreciated long-term securities to the fund. Participants also receive a charitable deduction for a portion of their contribution.
The UNH Foundation’s Pooled Income Fund was established in 1990 and is managed by State Street Global Advisors. The investment program is designed to produce some growth, with an emphasis on current income.
An investment in the pooled income fund yields lifetime quarterly payments.
Example:
Mr. Smith, age 70, donated appreciated securities valued at $10,000 to the UNH Foundation’s Pooled Income Fund. He purchased the stock for $2,000 12 years ago and wished to avoid paying capital gains tax (at a rate of 15 percent) on the $8,000 gain. Had he sold the stock, he would have been liable for $1,200 in taxes. By transferring the stock directly to the Foundation, he not only avoided those taxes, but also qualified for a federal income tax deduction of $5,585.
Mr. Smith or his designated beneficiary will receive lifetime quarterly payments based on the income generated by the full $10,000. When the last beneficiary passes away, the principal of the gift will be removed from the Pooled Income Fund and used to support acquisitions for Dimond Library.
