Charitable Lead Trust
Protect Your Assets
You can benefit from the tax savings that result from supporting Second Harvest Food Bank of Santa Clara and San Mateo Counties 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 Second Harvest Food Bank:
A charitable lead annuity trust pays a fixed amount each year to Second Harvest Food Bank 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 Second Harvest Food Bank go up as well.
An Example of How It Works
George would like to support Second Harvest Food Bank 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 percent of the initial fair market value) to Second Harvest Food Bank 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 $873,110. Assuming the trust earns an average 6 percent annual rate of return, George receives approximately $767,240 at the end of the trust term.
George's trust pays $175,000 (7 percent of the initial fair market value) to Second Harvest Food Bank each year for 15 years, which will total $2,625,000. After that, the balance in the trust goes to his children. Assuming a 6 percent investment return, the children will receive approximately $1,918,101.
*Assuming annual payments and a 2.4 percent charitable midterm federal rate.
Calculate Your Benefits
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- Contact Donor Relations Team at (866) 234-3663 or firstname.lastname@example.org to talk about supporting Second Harvest Food Bank by setting up a charitable lead trust.
- Seek the advice of your financial or legal advisor.
- If you include Second Harvest Food Bank in your plans, please use our legal name and federal tax ID.
Legal Name: Second Harvest Food Bank of Santa Clara and San Mateo Counties
Address: 750 Curtner Avenue, San Jose, CA 95125
Federal Tax ID Number: 94-2614101
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