Ideas and Strategies from the Office of Gift Planning at Princeton University
Anyone who knows Robert Johnstone III ’56 knows sailing boats is a lifelong passion. Sailing toward his 65th Reunion, Bob and his wife, the Rev. Mary Johnstone, docked funds in a charitable gift annuity after Bob sold his boat company, MJM Yachts, to their son Peter last fall. Their charitable gift annuity is part of the Annual Giving Legacy program.
To give 1956 a shot for the title “highest 65th Reunion class contribution ever to AG,” the couple, now living in Charleston, South Carolina, committed the lion’s share of their joint $1 million Princeton CGA to the Class of 1956 AG endowment. The couple made a similar gift in support of Mary’s graduate alma mater, Berkeley Divinity School at Yale. Both annuities provide retirement income for them.
“The AG Legacy gift program offered two interesting opportunities,” Bob said. “One was to offset some capital gains in 2019. And the other was, we’re blessed with this cash influx. Now where are we going to put it that’s reasonably secure?”
“We’re looking at a steady income source, and benefiting our two favorite institutions,” Mary said. “It’s turned out to be a very wise decision and a joyful one.”
A history major who spent time on Lake Carnegie sailing during his Princeton years, Johnstone went into the corporate arena before building a business based on his love of sailing. In 1977 he co-founded J/ Boats, Inc., with his brother, Rodney Johnstone ’58. J/ Boats built a worldwide business with more than 20 Boat of the Year awards to its credit. Along the way, Bob gained membership in the National Sailing Hall of Fame and received the Mystic Seaport America and the Sea honor.
Then, in 2002, Bob changed course to motor boats and founded MJM Yachts. The change came, according to the MJM website, because “we got older, so our boats had to reverse roles. I can enjoy a day sail on the latest J/, but quality cruising time is on a motorboat.” Bob cites Mary as the inspiration for the brand name MJM — Mary Johnstone’s Motorboat.
Sailing into Retirement
After passing the business on to the next generation, Robert and Mary did their homework. Before creating the CGA they talked with their financial adviser and concluded the risk/return balance of their retirement portfolio, considering the current market outlook, would best be served by allocating a significant portion to this legacy gift.
“Our motivation is as much self-interest as it is gratitude for the education, many good times and friendships made,” Bob said. “The sale of our company, MJM Yachts, last November, made this possible. In addition to offsetting $480,000 of the capital gains, Princeton’s Annual Giving Legacy Program returns a guaranteed income of 7 percent to Mary and me for our lifetimes, 88 percent tax-free. That’s like a low risk 9 percent dividend return.”
“And it’s a much more personal gift,” Mary added. “It enhances the whole matter knowing we’re giving back to both institutions as well as arranging for some income on our end.”
There was a romantic angle to their gift as well. The Johnstones’ gifts celebrate their 65th wedding anniversary next year, too.