You can benefit from the tax savings that result from supporting the Greater New Orleans Foundation without giving up the assets that you'd like your family to receive someday with a donation in the form of a charitable lead trust.
There are two ways that charitable lead trusts make payments to GNOF:
A charitable lead annuity trust pays a fixed amount each year to GNOF, or a fund managed by GNOF, and is more attractive when interest rates are low.
A charitable lead unitrust pays a variable amount each year based on the value of the assets in the trust. With a unitrust, if the trust's assets go up in value, for example, the payments to GNOF go up as well.
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An Example of How It Works
George would like to support GNOF and provide for his children. George received a windfall amount of income and needs a large income tax deduction to offset the income. Following his advisor's recommendation, George funds a grantor charitable lead annuity trust with assets valued at $1,000,000. George's trust pays $70,000 (7% of the initial fair market value) to GNOF each year for 15 years, which will total $1,050,000. After that, the balance in the trust reverts back to George. He receives an income tax charitable deduction of $955,700. Assuming the trust earns an average 6% annual rate of return, George receives approximately $767,240 at the end of the trust term. Best of all, George and his children can give it to their favorite causes through their donor advised fund during and after George's lifetime.
*Based on a 1.2% charitable midterm federal rate. Deductions and calculations will vary depending on your personal circumstances.
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- Contact Holly Robbins Hermes at 504-620-5264 or email@example.com to talk about supporting GNOF by setting up a charitable lead trust.
- Seek the advice of your financial or legal advisor.
- If you include GNOF in your plans, please use our legal name and federal tax ID.
Legal Name: Greater New Orleans Foundation
Address: 919 St. Charles Avenue, New Orleans, LA 70130
Federal Tax ID Number: 72-0408921