Ideas and Strategies from the Office of Gift Planning at Princeton University
As his 50th Reunion approached, Bill Paternotte ’67 thought, “I want to make a tangible statement of what Princeton has meant to me.” But how? When he learned a life income gift to Princeton would also be counted as a contribution to Annual Giving through a new program, thereby adding to his class’s legacy, he found his answer.
“I had a very good experience as an undergrad but what has been even more rewarding are the connections I’ve made since then,” the former ’67 alumni class president and loyal AG volunteer says. “The network and the ties you create over a lifetime—Princeton is the gift that keeps on giving in that respect.”
Paternotte is a partner and senior client advisor at Brown Advisory in Baltimore, Maryland, with nearly 50 years’ experience in financial markets. Some ventures in real estate provide cash flow, but he does not own bonds. He used investments from a stock-heavy portfolio to create a charitable remainder unitrust (CRUT) as a “bond substitute” with a yield of five percent on the principal.
The gift “turned a low-basis, non-income producing security into an income-producing one,” he says. “Assuming you are in a situation where you’ve done what you can for your heirs, this is a nice diversification move.”
The price of the stock Paternotte put in the CRUT for the University had appreciated considerably higher since he bought it, so he saved on the capital gains hit he might have taken in selling it outright. Another plus: he can bump up his potential income stream by adding gifts of other highly appreciated stocks to the CRUT in the future.
For more information on life income gifts, read:
Life Income Gifts: What You Need to Know
Paternotte’s Tiger loyalty started very early, with his grandfather Dwight Harris ’1918 taking him to Palmer Stadium for his first football game (his father and father-in-law were in the Classes of 1944 and 1947 respectively). At 8 years old, he and best friend Richard Fleming ’68 decided they would both go to Princeton. Paternotte didn’t apply anywhere else. He matriculated with more than a half-dozen classmates from Baltimore’s Gilman School, several of whom he became even closer friends with after University graduation.
The network keeps growing. When Paternotte returned from family vacation this year a new member of the Brown Advisory team stopped by to say hello—a graduate of the great Class of 2015.