Charitable Pooled Income Fund

Anabaptist Foundation’s Pooled Income Fund is a charitable trust, with the Foundation as the trustee, that allows donors or other beneficiaries to receive interest income for life from the gift.

Anabaptist Foundation pays interest to the pooled income fund out of its earnings from its charitable activities. Donors have peace of mind, knowing their funds are at work among our own people, helping to sustain our values and way of life.

Donors receive a one-time tax deduction for a portion of their gift. The amount of the tax deduction as a percentage of the gift depends on a donor’s age. The older donors are at the time they make gifts, the larger their tax deduction will be.

Donors will receive the interest earned by their gift. The rate is adjusted quarterly. Donors will not receive back any of the principal amount of their gift, since it will be reinvested to continue generating interest income.

Quarterly income checks will be mailed to donors on or about the first day of March, June, September, and December.

No. All income generated by the Pooled Income Fund must be distributed to the income beneficiaries. However, Pooled Income Fund donors may direct that income to support special interest causes through Anabaptist Foundation’s Charitable Gift Fund.

Yes. Pooled Income Fund income is classified as ordinary earned income, taxable at the rate determined by donors’ tax bracket. Donors will receive an annual Schedule K-1 form from Anabaptist Foundation for interest received, for use when filing taxes.

Yes, donors may designate spouses, or a parent (including in-laws) as a beneficiary instead of, or in addition to, themselves. Beneficiaries who are significantly younger than the donors may reduce the amount of the donors’ tax deduction.

At the death of the final income beneficiary, Anabaptist Foundation removes the principal amount of the gift from the Pooled Income Fund and distributes it to charity.

While donors relinquish control of their gift to Anabaptist Foundation, they may give nonbinding advice at the time they make the gift regarding which charities they would recommend that Anabaptist Foundation support with the remainder interest, as long as they are churches or registered charities with 501(c)(3) tax-exempt status. While donors may change the charities they recommend at any time, they may not recommend distributions to individuals or family members.

The initial minimum is $25,000. Subsequent gifts in increments of $10,000 or more may be made at any time, which are added to the Pooled Income Fund at the next quarterly valuation.

Yes, donors may give a cash gift, or any other asset with a fair market value, such as real estate, stocks, mutual fund shares, or commodities. Anabaptist Foundation converts gifted assets into cash and places them into the Pooled Income Fund.

Yes. By giving appreciated assets like real property, stocks, and mutual fund shares to charity, donors avoid capital gains taxes and receive a tax-deductible receipt. Anabaptist Foundation does not pay tax when these gifts are sold, leaving more dollars available for charity.

Anabaptist Foundation does not charge a fee at the time donors make a gift, nor during the time their gift is invested in the pooled income fund. At the death of the final income beneficiary, when the funds are withdrawn from the pool and distributed to charity, a modest fee of 2% or less is withheld for Foundation services. On gifts of non-cash assets such as real estate or shares of stock and mutual funds, there may be additional fees to cover liquidation costs.

No. IRS regulations do not permit Anabaptist Foundation to return a Pooled Income Fund gift to donors. After a gift is made, Anabaptist Foundation cannot return it to donors. The tax advantages donors receive are based on the irrevocable nature of the gift. Once a gift is made, donors cannot change who receives income from their gift, since tax deductions are based on the ages of the named beneficiaries.

First time and subsequent gifts can only be placed into the Pooled Income Fund on quarterly valuation dates of April 1, July 1, October 1, and January 1, or the first official business day thereafter. If donors make a gift in between these dates, Anabaptist Foundation will hold their funds without interest until the next valuation date.

A gift can be made by contacting Anabaptist Foundation at (800) 653-9817 for a proposal showing an estimate of a donor’s projected income and tax deduction, based on the amount of their gift and the age(s) of the beneficiaries they name. Please note that this proposal is only an estimate, since overall situations and tax bracket may vary, producing different results. Anabaptist Foundation recommends that donors always consult with their accountant or tax preparer.