St. Lawrence University: Manley Society

Definition
Gifts from many donors are co-mingled for investment purposes in the St. Lawrence University Pooled Life Income Fund, a separate entity from, but under the control of, St. Lawrence University. Only the income from the investment of the fund is distributed to the participants each year.

Because only the income from the investment of the fund is distributed to beneficiaries each year, the level of income will vary from year to year based on the performance of the fund. The fund is unitized to determine the amount paid to each beneficiary. The investment philosophy of the fund is to generate a balance of income and capital appreciation each year to provide increasing income to beneficiaries and a larger remainder for St. Lawrence. The yield used for fund in financial projections in 2006 is 4.48%.

The minimum initial gift to the fund is $10,000. Additional gifts may be made at any time for as little as $1,000. Payments may be made to one or two beneficiaries for life. Income beneficiaries must be at least 50 years old. Gifts to the fund may be cash or publicly traded securities held long term. The start of income from the fund cannot be deferred. Payments must be made on a quarterly basis (at the end of March, June, September and December), and may be mailed to you or deposited electronically to your bank account.

St. Lawrence does not charge any fees to generate financial projections or contracts to the pooled fund.

Income for someone else: The pooled fund may used to provide income for someone other than the donor or the donor's spouse. It can be a creative way to make a gift to St. Lawrence and also provide income to a parent, sibling, child or other loved one. Generally, an income tax charitable deduction is generated for the donor at the time the gift is made. The donor must be careful, however, in deciding what asset to gift to the fund, and what level of income to provide to the beneficiary. If an appreciated asset is used, the donor may be required to declare some or all of the capital gain on the asset. Also, the income payments are considered a “gift” from the donor to the beneficiary, and if payments are above the annual exclusion (currently $12,000 per person per year), gift tax may be an issue as well. With careful planning, problems can be avoided.

Deferred income payments: You cannot defer the start of income payments from the fund.

Testamentary gifts: A gift to the fund may be planned through your estate to provide income for heirs before passing the remainder to St. Lawrence. It is important to discuss this option with your gift planning and legal advisors to structure the gift correctly and make sure the plan will meet your intentions.

Because your gift to the fund is irrevocable, the government allows an income tax charitable deduction for some portion of your gift. The age(s) of the income beneficiary(ies) and the historical rate of return for the fund are the primary determinants of the amount of the income tax charitable deduction.

If you gift an appreciated security (held long term) to the fund, in most cases you will not need to declare any capital gain on that security.

Pooled fund payments to beneficiaries are taxable income. All of the income from the fund is taxed as ordinary income.

While projections can be created, the actual remainder value will depend on the market performance of the fund and how long the fund makes payments to beneficiaries. Projecting the remainder value may be of particular interest to a donor who wishes to provide a remainder to St. Lawrence at a certain dollar level.

While every gift situation is unique, there are several steps that may be outlined to help clarify the process. When an individual creates a gift-with-income plan at St. Lawrence, he/she will most likely follow steps similar to the ones below. The process often begins with a conversation:

We talk. An initial conversation with the planned giving office is advisable to help the university understand your priorities and goals and determine which plan(s) may best fit your needs. The planned giving office will then prepare a proposal for your review.
You review. The proposal will include a financial projection with explanations and background information for review by you and your advisors. Additional information or further projections may be required to answer questions and clarify the exact benefits and circumstances of a plan that will be right for you.
You decide. Once all of the information is presented and reviewed, it is time to decide if the timing and circumstances are right to proceed and create your plan.
You arrange transfer. At this point you write the check, authorize transfer of the stock, or otherwise arrange for ownership of the asset(s) to pass to the St. Lawrence Pooled Fund account. Once ownership of the asset passes to the account, the planned giving office determines the gift date and the value of the gift. (It's easier with cash, but gets more complicated with multiple transfers of stock, for example). That data then allows the office to prepare final projections and a pooled fund contract.
You sign. Final materials and contracts are sent for signature, along with a gift receipt. At this point the planned giving office will arrange the method for future payments. The office will also wish to make sure the university has documented your wishes for the final use of your gift at St. Lawrence.
You relax, payments begin. The first payment is made at the end of the current quarter. A first payment may be a partial payment, depending on the date of the gift. The planned giving office will also contact you to ensure that the first payment was processed correctly.

If you are a new member of the Manley Society, you will receive letters of welcome.
At the end of each payment period, you will receive either your check, or a printed “cash advise” of your electronic payment directly from State Street Global Advisors through their Boston offices.
You will receive a financial report from the planned giving office each January.
K1 income tax statements are targeted for mailing by February 28 each year.
As a Manley Society member, you will receive the society annual report each year, and an invitation to the annual meeting held during reunion each June.
We also ask that income beneficiaries report to us any change in address or bank account information as soon as possible, so that there is no interruption in the processing and receipt of your payments.