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Learn More About Pooled Income Funds for Charitable Giving

A Pooled Income Fund (PIF) lets you combine charitable giving with a guaranteed income for you and at least one beneficiary. The money you have put into the fund is combined with other funds from other donors and you will receive income from the investments the fund makes. After your death, your beneficiaries will receive income from the investments until there are no living beneficiaries remaining. The charity then gets to keep the balance of the fund.

There are many variables concerning PIFS, and this is a type of charitable giving you'll need to consult with a professional about, however, it is more than just a tax strategy in that it provides income generated from the investments the fund makes while at the same time providing a way for you to contribute to one or more charitable organizations with the tax advantages you'll need.

You can choose one or more charitable organizations to benefit from the fund. You'll be able to choose up to ten such organizations that will receive grants from the fund once the last beneficiary is no longer living. You can even specify for which purpose the money is to be used within the charitable organization that receives the grants. Pooled Income Funds offer you wide latitude in the choices you make. For example, you can choose two beneficiaries or you can be one of the beneficiaries and choose one more person who will benefit from the investments the fund makes.

You can also decide if both the beneficiaries will receive disbursements at the same time, thereby splitting the proceeds or if only one of them will receive the disbursements, and then, upon the death of the first beneficiary, the second beneficiary would receive disbursements for the remainder of his or her life, at which time the charitable organization or organizations that you originally chose will receive the funds from the gift fund.

For example, you may choose to be the first beneficiary and then designate someone who will receive the disbursements upon your death. In this way, you would receive the full benefit of the investments the fund makes. Or, you can choose to share those proceeds with your beneficiary and then upon your death or the death of the other beneficiary, the remaining living person would receive the full benefit of the investments until their death, at which time the entire fund would belong to the charity or charities which you originally designated.

You can, however, change the charitable organization or organizations to which you have designated the gift fund as many times as you choose. Upon your death however, this could no longer be changed.

You'll want to obtain the services of a professional financial advisor that you trust to help you set up the pooled income fund. They can help you research the charities you are interested in supporting and they will be able to locate the information as to the track record of the investments. While the pooled income fund is a great way to allow for charitable giving while still receiving an income, you'll benefit from the advice of those who have had experience in dealing with this type of charitable giving. This type of gift allows you to leave a lasting legacy while at the same time providing you with a variety of choices so that you are in complete control of how your gift is used. At the same time, you won't have to choose between leaving your money to a loved one or to a charity; you can do both with the pooled income fund.