Opportunities for Public Charities

| September 1, 2011 | 0 Comments

Public charities such as churches can increase their assets over the long term by offering their congregation the opportunity to donate to the church and earn income at the same time. The public charity sets up a “pooled income fund.” The individual donates to the church (tax deduction for the taxpayer at the time the donation is made) via the pooled income fund.

The income that the donation earns while the taxpayer is living is distributed to the taxpayer on a quarterly/annual basis. The earnings are taxable to the taxpayer in the year earned.

When the taxpayer dies, the donated asset is transferred to the public charity. This asset is out of the donor’s estate at the time the donation is made. The public charity (example: church) can use the funds as it designates.

This type of fund can become a tool for public charities to increase their assets long term. The fund can accept one-time or annual donations, thus enabling all members to participate.

If you know of a public charity that may benefit or be interested in setting up a “pooled income fund,” please contact me for additional information.

Comments are closed.