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§ 5.5 POOLED INCOME FUNDStrustee. An income beneficiary of, or donor to, the fund may not be a trustee. Adonor may be a trustee or officer of the charitable organization that maintainsthe fund, however, provided that he or she does not have the general trustee’sresponsibilities toward the fund.Unlike other forms of planned giving, only certain categories of charitableorganizations may maintain a pooled income fund. Most types of public charitiescan maintain such a fund, although private foundations and some nonprivatefoundations cannot. 22For a contribution of a remainder interest to a charitable organization, madeby means of a pooled income fund, to be deductible, nine elements (of whichsome have been described) must be present. These are:1. The donor must transfer an irrevocable remainder interest in the property.2. The remainder interest must be transferred to or for the use of a charitableorganization that is qualified as at least one of the types of public charities.3. The donor must create, by means of the transfer to the fund, an incomeinterest for the life of one or more noncharitable beneficiaries.4. The property that is the subject of the gift must be commingled withproperty transferred by other donors.5. There must be no investments by the fund in tax-exempt securities.6. The fund must consist only of amounts transferred in compliance withthe pooled income fund requirements of law.7. The fund must be maintained by the charitable organization to which theremainder interest is contributed.8. A donor or a beneficiary of an income interest in a pooled income fundcannot be a trustee of the fund.9. The income paid each year to the income beneficiaries is determined bythe rate of return earned by the fund for the year.The deductible portion of a transfer of property to a pooled income fund isdetermined by reference to interest rates and actuarial tables promulgated by theDepartment of the Treasury.The same general tax advantages of gifts to charitable remainder trusts areavailable for gifts to pooled income funds. This is particularly true when the gift ismade using fully marketable and appreciated securities. The pooled income fundtransfer may accommodate a smaller amount (value) of securities than a transfer toa remainder trust. If fixed income is an important consideration, however, the charitableremainder annuity trust (see above) or the charitable gift annuity (see below)will be preferable to a gift to a charitable remainder unitrust or pooled income fund.(b) Valuation and Assignment of UnitsA pooled income fund is divided into units, each of which represents an interestin the fund equal in value to each of the other units. The fair market value of the22 The distinctions between public and private charities are summarized in § 3.4. 157