Pooled Income Fund
In the Stephens College Pooled Income Fund, gifts of $10,000 or more are combined with other gifts and invested in a professionally managed investment portfolio. At the death of the final beneficiary, the donor’s shares become a gift to the College. The donor receives income for life and an immediate charitable deduction.
Benefits of the Pooled Income Fund:
- Income for life for you or your designated beneficiaries. The amount of income varies based on the fund's performance.
- An immediate federal income tax deduction. The amount of the deduction is based on the present value of the interest Stephens receives after the donor's life.
- No capital gains tax if appreciated assets, like stocks or real estate, are used to fund the gift.
- A possible reduction in estate taxes.
Nancy bought $5,000 worth of stock when she was 20 years old and a student at Stephens. Today, Nancy is 50 and that stock has appreciated to a value of $50,000. However, the stock pays low or sometimes no dividends. Nancy wants to sell the stock and increase her income, but if she does, she will owe capital gains tax. This will reduce the amount of money she will have to reinvest.
Instead, Nancy donates her stock to Stephens in exchange for $50,000 worth of an interest in our Pooled Income Fund. The first year after she invests, the Pooled Income Fund has a 5% return, so Nancy receives $2,500 in income. (Future income will vary with the fund's investment performance.) She also gets an income tax deduction of $14,378 (based on the present value of the remainder interest) and avoids any capital gains tax.
