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The UGAF Pooled Income Fund operates much like a mutual fund: individual contributions are "pooled" for investment purposes. In return, the net income of the entire fund is distributed on the basis of the number and value of "shares" held by each donor. All gifts are irrevocable and qualify for an income tax charitable contribution deduction, the amount of which is based on the age of the beneficiary(ies) and the recent performance of the fund.
A donor must make a minimum initial contribution of $5,000 (additional contributions of $1,000 or more may be made), and a maximum of two beneficiaries may receive the life income (each beneficiary must be at least 50 years old when designated). The quarterly payments are taxed as ordinary income.