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FUNDAMENTALS OF PLANNED GIVINGcontributed. While this means that the charitable organization must retain theability to select the trustee (or trustees) of a pooled income fund, it does notmean that the charitable organization must be the (or a) trustee.Some charitable organizations designate, in the instrument that creates thepooled income fund, a financial institution as trustee of the fund. This can createa problem if the charitable organization and the financial institution subsequentlypart ways. A more prudent approach is to enable the charitable organizationto name the trustee in a separate agreement and/or to be a co-trustee withthe financial institution. In this way, if a new financial institution is selected, thepooled income fund organizational instrument need not be altered.(g) Pooled Income Fund InstrumentsThe document by which a pooled income fund is created is either termed a declarationof trust or, when a basic contractual relationship with a trustee is embodiedin the document, a trust agreement. The provisions of a pooled income fundinstrument must, to ensure the availability of the charitable deductions, complywith the various operating rules. The IRS has issued sample provisions forpooled income fund organizational documents.A pooled income fund declaration of trust or trust agreement must containprovisions:• Requiring that the property transferred to a pooled income fund by eachdonor be commingled with, and invested or reinvested with, other propertytransferred to the fund by other donors• Prohibiting a pooled income fund from accepting or investing in taxexemptsecurities• Prohibiting the fund from having, as a trustee, a donor to the fund or a beneficiary(other than the charitable organization that receives the remainderinterests) of an income interest in any property transferred to the fund• Directing the trustee of the pooled income fund to distribute income currentlyor within the first 65 days following the close of the tax year inwhich the income is earned• Stating that the income interest of any designated beneficiary shall eitherterminate with the last regular payment made before the death of the beneficiaryor be prorated to the date of his or her death• Stating that, upon termination of the income interest(s) retained or createdby a donor, the amount severed from the fund must either be paid to,or retained for the use of, the designated charity• Prohibiting the fund from engaging in any act of self-dealing• Requiring such distributions as are necessary to enable the fund to satisfythe private foundation mandatory payout requirements• Prohibiting the fund from retaining any excess business holdings• Prohibiting the fund from making any jeopardizing investments• Prohibiting the fund from making any taxable expenditures 160