Pooled Income Fund
Unitarian Universalism is our inheritance, a precious gift passed on from one generation to the next. For the moment, we are the beneficiaries and trustees of this liberal religious heritage. Our principles and purposes proclaim fundamental values that bind individual to individual and congregation to congregation across continents and across generations. And like Unitarians Universalists before us, we have a responsibility to care and provide for the future of our religion. If we don't do it, who else will?
Only Unitarian Universalists know the full value of our shared inheritance. Only we can give in proportion to the benefits we have received. And when we do give, we gain far more than we give away. Because giving exercises the spirit; it expands our capacity to love and to be loved.
What is the Unitarian Universalist Association (UUA) Pooled Income Fund?
Established by the
Unitarian Universalist Association of Congregations (UUA) in 1973, the UUA Pooled
Income Fund (PIF) is an IRS-approved common fund operated under the auspices of
a trust agreement. The Association and State Street Bank are co-trustees of
Boston, MA.
A "life-income" gift arrangement, the PIF makes quarterly payments to one or two people until they die. Payments vary in amount. Donors are eligible for both income and capital gains tax savings. Upon the death of the income recipient(s), the PIF sends a check to the Unitarian Universalist Association, which will in turn write a check to your congregation for all or a portion of your gift according to your wishes.
Current gifts to the Fund exceed $3.2 million from 161 individuals. On December 31, 2001 the Fund had a fair market value of $4,264,829.22.
How does the Pooled Income Fund work?
A gift agreement
is completed for every contribution. It names the donor(s), the recipients of
the PIF to receive payments and the UU organization which will receive what
remains of the gift in the end.
A gift is complete when the donated assets have been permanently transferred to the fund and the gift agreement has been signed by the donors, the UUA, and State Street Bank.
All PIF contributions are invested together for balanced growth and income. Each gift is assigned a fixed number of "units of participation." Quarterly, the Fund pays participants their proportionate unit share of income from interest and dividend earnings. Capital gains are never distributed to participants.
When the income recipients name in a gift agreement have died, State Street removes the assigned units from the Fund and issues payment. The final beneficiary, the UUA or a congregation receives the fair market value of units originally assigned to that gift less a bank processing fee. With sound investment, this final distribution should be greater than the original contribution. Historically, this has been true.
Who can receive income for life?
One or two people may
receive income for the rest of their lives. Usually, the income recipient is the
donor; but you may name others. Life partners and married couples often receive
payments jointly, then to the survivor. The suggested minimum age for income
recipients is 55.
Is there a minimum contribution?
Yes. Your initial gift
must be $5,000 or more. You may make additional contributions of $1,000, as long
as the same gift agreement applies to the new donations. If you make additional
gifts but want them to support different purposes, then a new initial gift of
$5,000 is needed.
What kind of income will I see?
Your payments will vary
from one quarter to the next. Recently payments have averaged 5.17% of the
annual average fair market value of the Fund. Because the PIF payments come from
dividend and interest income, largely the bond market affects yield to income
recipients.
How will I be paid?
Payments are mailed (or deposited
directly to your bank account) four times a year by the 15th of January, April,
July, and October. Payments are reportable as ordinary taxable income.
Participants receive an annual K-1 statement for income tax reporting purposes.
Can a congregation receive my gift?
Yes! You may name
your own church, fellowship, or society or any other UUA-affiliated organization
to benefit from your PIF gift. Because the UUA has an important and distinct
role in the health and vitality of Unitarian Universalism, we ask you to give
35-50% of your gift to the Association. However, the choice is entirely up to
you.
Can I donate stock or mutual funds?
Yes. Highly
appreciated, low-yielding securities are ideal. Donors avoid capital gains taxes
and often double their income! Gifts of cash, publicly-traded stocks, bonds,
mutual fund shares, and life insurance policies are appropriate for the PIF.
What kind of charitable income tax deduction will I get?
You will be eligible to claim a one-time, charitable income tax
deduction for a percentage of your gift. US Treasury tables determine your
deduction, based on actuarial data and the PIF's historical rate of return. Ask
us to prepare a gift illustration for you.
Who manages the UUA Pooled Income Fund?
State Street
Global Advisors in Boston, Massachusetts, is co-trustee and manager of the PIF.
Founded as a trust company in 1792, State Street is one of the largest bank
money managers in the US, with over $485 billion in assets under management.
State Street currently manages several hundred pooled income funds.
How much income can I expect?
Investment strategy and
market performance combine to produce the fluctuating income stream PIF
participants enjoy. We strive to meet a minimum income yield of 5.0 - 5.75%. The
average annualized income yield for 2001 was 5.17%. Total return goal for the
fund is at least 10%. For calendar 2001 the total return was 5.88%.
The co-trustees have two fiduciary concerns: 1) To increase the value of the gifts over time, to ensure the value of the Fund increases, resulting in meaningful gifts many years from now; 2) To provide a reasonable and reliable income stream to donors and other income recipients. PIF assets are allocated 75% in fixed equities, 24% in common stocks, and the rest in cash.
Does the PIF follow socially responsible investing?
Absolutely. All UUA investments follow a strategy for socially
responsible investing. We do not invest in companies which manufacture
tobacco-based products, or those which earn a significant portion of their
revenue from the production and sale of weapons. Furthermore, we reserve the
right to withdraw investments from companies which are known to mistreat their
employees, pursue discriminatory employment practices, or act in blatant
disregard for the environment.
How will the PIF work for me?
To request a gift
illustration based on your personal situation, please fill out the secure and
confidential reply form. It will be sent to the UUA Office of Legacy Gifts.
For more information contact giftplans @ uua.org.
Last updated on Wednesday, October 3, 2007.
