What is a pooled income fund?

A pooled income fund is indeed a trust that combines contributions from multiple donors and is typically managed by a charitable organization. This structure allows individuals who want to support a charity to donate assets—often cash or securities—into the fund. These contributions are pooled together and invested, with the income generated used to provide payments to the donors or their beneficiaries for a specified period of time. After the designated period, the remaining assets in the fund go to the charity.

This setup offers a dual benefit: donors receive a charitable deduction for their contributions and ongoing income from the fund, while charities benefit from the pooled resources that enhance their financial capacity. This collaborative approach to fundraising distinguishes pooled income funds from other investment vehicles, which may focus on individual accounts or specific investment strategies without the charitable aspect.

The other options do not accurately describe a pooled income fund—the focus on diverse asset classes for growth, income-generating assets, or individual accounts for retirement savings reflects different types of investment vehicles that do not incorporate the collective, charitable intent of a pooled income fund.