Just as a mutual fund combines investments, a pooled income fund combines gifts from many donors into a common investment pool. Your gift purchases units in the investment pool. The entire pool is invested, and a pro-rata share of income earned by the pool is distributed to each donor or income beneficiary.
Duke University has two pooled income funds:
- The Tower Fund was established for donors who are primarily seeking high current income. The assets of the Tower Fund are invested in a manner that seeks to achieve a high income yield with a minimum of risk to the principal.
- The Quadrangle Fund was established for donors who are seeking a modest income in the short-term and hope to earn a higher income in the long-term. The Quadrangle Fund is managed for growth.
When you make a gift to a pooled income fund, you get to decide what program area at Duke the remaining assets will ultimately support. You receive an immediate income tax deduction for a portion of the gift, and this deduction can be used over as many as six consecutive tax years.
Our gift planning calculator can provide a preliminary estimates of the payout and deduction amounts for a gift to the Tower Fund or Quadrangle Fund. Generally, a gift to the Quadrangle Fund will yield a higher income tax charitable deduction than a gift to the Tower Fund. Duke's Office of Gift Planning can help you decide which pooled income fund is best for you.
Example: In January 2016, Mrs. Smith, age 65, invests $10,000 cash in the Duke Tower Fund. For her investment, she will receive an annual payout for her lifetime. The initial payout will be approximately $250 annually, and the income tax deduction will be about $6,700, which may be used over as many as six years.