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Kitces: CRT vs split interest pooled income funds

Posted: Thu Jun 10, 2021 4:29 pm
by is50xenough
Have high regard for Kitces so wonder what folks think of Split-interest using new pooled income funds over CRTs? Seems like could be good opportunity although in reading this seems like end up giving a larger amount of money of the starting "deposit" to the charity than what I thought CRTs (CRUT or CRAT?) gave.

Love to hear some discussion.

This article seems public since allowed to email to friends---you are all my friends right.....?

Maximizing Split-Interest Charitable Deductions With New Pooled Income Funds Over CRTs ... n=ShareBar

Re: Kitces: CRT vs split interest pooled income funds

Posted: Fri Jun 11, 2021 5:33 am
by is50xenough
I should note that I read wiki and searched forum but don’t see much on split interest pooled income and for sure no comparisons.

Re: Kitces: CRT vs split interest pooled income funds

Posted: Mon Jun 28, 2021 1:31 pm
by Phil DeMuth
The Pooled Income Fund (PIF) is an under-utilized vehicle for split gifts to charities and individuals. Donors get an up-front charitable deduction and then their named beneficiaries get the annual dividends and income from the fund. The charities get the residual amount after the beneficiaries die.

I think the problem is that PIFs must be offered by public charities, which look to their short-term interests by investing the proceeds for maximum benefit to themselves (via high fees and growth-oriented investments) and minimum payout to the non-charity beneficiaries. Expense ratios, both for operating the funds themselves as well as the underlying investments they make, are high. Since they don't pencil out, no one uses them and there is little interest.

If Vanguard's Donor Advised Fund offered a low ER "New Pooled Income Fund" (see Kitces' article) and invested the money, e.g., in a Vanguard equity-income fund, the world would beat a path to its door.

Or -- am I wrong?