The Personal Income Fund is a "pooled fund." Like a mutual fund, a pooled income fund combines individual gifts of cash or securities for investment purposes. Each gift is added to a portfolio of other gifts and invested primarily for dividends and interest, secondarily for capital growth. The income beneficiary is credited with units or shares in the Fund. The Fund pays out what it receives each year in interest and dividend income, divided by the total number of outstanding units held by the income beneficiaries. Income is disbursed quarterly to the income beneficiaries.
What can I give to the Personal Income Fund?
Only cash or negotiable securities.
How long can the Personal Income Fund pay income?
For the lifetime(s) of the income beneficiaries only.
How many income beneficiaries can receive payments from the Personal Income Fund?
One or two individuals.
How many charities can benefit from a Personal Income Fund gift?
How much income does the Personal Income Fund pay?
The fund pays out what it receives each year in interest and dividend income, so payments vary from year to year. Capital gains on the fund’s assets are not distributed but added to the fund’s principal. Over the last three years, the Fund has paid:
Personal Income Fund Returns
How is the amount of annual income from the Fund determined?
By the income received by the Fund in the previous year.
How often is (or can) Fund income be paid?
When does the Personal Income Fund have to begin paying income?
Immediately. No deferral is possible.
How is the income from the Personal Income Fund taxed?
All as ordinary income.
What formalities and documents are required to give to the Personal Income Fund?
Prospective donors are given a copy of the Declaration of Trust which describes the Fund's operations. A two-page “instrument of transfer” must be signed by the donor and the College to complete the gift.
How are the assets in the Personal Income Fund administered and invested?
In a mix of dividend-paying stocks and bonds of varying duration, under Davidson's life income gift management arrangement with State Street Global Advisors. These assets are chosen to provide a balance between current income, capital growth, and expected increases in dividend and other income.
How is the income tax deduction calculated for a gift to the Personal Income Fund?
Unlike the gift annuity and charitable remainder trust, the income recipient’s age is not a determining factor. Instead, the deduction is based on the highest rate of income the fund has paid out over the preceding three years. This makes the deduction more attractive if the goal is to provide income to a relatively young person.