When a donor establishes a charitable remainder trust, he or she transfers cash or property to a trust and retains for him or herself or another income beneficiary an annual income from the trust which may be a designated fixed dollar amount or a fixed percentage of the value of the trust's assets, for life or for a term of years. The donor enjoys a federal income tax deduction for the value of the gift which is calculated on the amount contributed, the term of the trust or the age of the income beneficiaries, and the projected amount to be paid to the beneficiaries. If the charitable remainder trust is funded with appreciated property the donor avoids capital gains tax on the transfer in addition to making the future of the Institute more secure. With a gift to the Institute's pooled income fund, a donor transfers cash or stock to the Institute. The funds are invested and the fund's annual income is distributed proportionately among the pooled income participants, for life.
Annual income is variable and depends on the earnings of the fund.
At the death of the pooled income fund participant, or his or her income beneficiary, the unit value of the contribution is distributed to the Pinchot Institute for Conservation. Contributors to the pooled income fund realize the same tax benefits allowed for the charitable remainder trust. The advantages of life income and the opportunity to participate at a gift level that is more modest than the amount that might be necessary for the establishment of a charitable remainder trust makes this option both attractive and accessible to many prospective donors. An interested donor can give a home, condominium, or farm to the Pinchot Institute for Conservation through a life estate agreement. Such an agreement can assure the donor lifetime use of the property, while affording a charitable tax deduction calculated on the value of the property, less the value of lifetime use.