1. This presentation booklet has been provided to you for use in this educational seminar. This presentation is not an advertisement and is not intended for public use or distribution beyond this meeting. Bernstein does not provide tax, legal or accounting advice. In considering this material, you should discuss your individual circumstances with professionals in those areas before making any decisions. 15 th Annual DC Planned Giving Days May 2007 What I Need to Know about Investing as a Gift Planner and Why Donald Kent, Principal Bernstein Global Wealth Management

2. Investments For Gift Planners 2007  Build credibility and open the door to discuss assets with prospects and their advisors  Dynamic relationship between gift planning and investment planning  Competitive advantage  Meeting your own objectives Why Should I Care About Investments?

3. Investments For Gift Planners 2007  Basic asset classes  Volatility vs. return  Diversification  Time horizon, risk tolerance, spending needs and other key factors in investment planning and gift planning  Special Gift Planning issues  Alternative Investments Key Principles to Master

4. Investments For Gift Planners 2007 Investment-Planning Policy  Establish time horizon  Understand the nature of risk  Create an asset balance that meets investment objectives

5. Investments For Gift Planners 2007  Superior long-term returns historically  Short-term volatility mandates long-term investing Past performance does not guarantee future results. Why Stocks?

6. Investments For Gift Planners 2007 $1 Logscale Inflation: $11 T-Bills: $22 Bonds: $71 Stocks: $3,071 Annualized Returns 1926–2006 Stocks10.4% Bonds5.4 T-Bills3.9 Inflation3.0 Stocks Have Won over Long Term Past performance does not guarantee future results. Stocks are represented by the S&P 500; bonds by long-term government bonds through 1962 and by five-year Treasuries thereafter; T-bills by three-month Treasury bills; and inflation by the Consumer Price Index. Source: Bureau of Labor Statistics; Center for Research in Security Prices; Compustat; Roger G. Ibbotson and Rex A. Sinquefield, “Stocks, Bonds, Bills, and Inflation: Year-by-Year Historical Returns,” University of Chicago Press Journal of Business (January 1976); and AllianceBernstein 26344352617988970670

7. Investments For Gift Planners 2007 Average 12% Stock Returns Have Been Volatile over the Short Term S&P 500: Annual Returns Past performance does not guarantee future results. Source: Compustat; Roger G. Ibbotson and Rex A. Sinquefield, “Stocks, Bonds, Bills, and Inflation: Year-by-Year Historical Returns,” University of Chicago Press Journal of Business (January 1976); and AllianceBernstein Best Year 54% Worst Year(43)%

8. Investments For Gift Planners 2007 Major Declines in the Stock Market S&P 500 Growth of $100,000 $63.6 Mil. (15)% (30)% (17)% (43)% (29)% (16)% (22)% (15)% (41)% Past performance does not guarantee future results. Source: Compustat; Roger G. Ibbotson and Rex A. Sinquefield, “Stocks, Bonds, Bills, and Inflation: Year-by-Year Historical Returns,” University of Chicago Press Journal of Business (January 1976); and AllianceBernstein (15)%

9. Investments For Gift Planners 2007 Average 10% Five-Year Losses Have Been Rare Best Case 29% Worst Case(12)% S&P 500: Rolling Five-Year Periods (Annualized) Past performance does not guarantee future results. Source: Compustat; Roger G. Ibbotson and Rex A. Sinquefield, “Stocks, Bonds, Bills, and Inflation: Year-by-Year Historical Returns,” University of Chicago Press Journal of Business (January 1976); and AllianceBernstein

10. Investments For Gift Planners 2007 Stocks Have Not Lost Money over the Long Term S&P 500: Rolling Periods (Annualized) Average 11% 15 Years Average 11% 20 Years Average 11% 30 Years Past performance does not guarantee future results. Source: Compustat; Roger G. Ibbotson and Rex A. Sinquefield, “Stocks, Bonds, Bills, and Inflation: Year-by-Year Historical Returns,” University of Chicago Press Journal of Business (January 1976); and AllianceBernstein Best Case19% Worst Case 1% Best Case 18% Worst Case 3% Best Case 14% Worst Case 8%

11. Investments For Gift Planners 2007 Percent of Times Beating Inflation 1926–2006 Stocks68%90%100% T-Bills64%67%68% Bonds62%68%69% One Year10 Years20 Years Past performance does not guarantee future results. Treasury securities are guaranteed by the United States government as to the timely payment of interest and principal if held to maturity. Stocks are represented by the S&P 500; bonds by long-term government bonds through 1962 and by five-year Treasuries thereafter; and T-bills by three-month Treasury bills. Source: Bureau of Labor Statistics; Center for Research in Security Prices; Compustat; Federal Reserve; Roger G. Ibbotson and Rex A. Sinquefield, “Stocks, Bonds, Bills, and Inflation: Year-by- Year Historical Returns,” University of Chicago Press Journal of Business (January 1976); and AllianceBernstein

12. Investments For Gift Planners 2007  Low correlation to US markets  Access to successful markets/industries  Reduced volatility  Historical risk/return “sweet spot” Why International?

13. Investments For Gift Planners 2007 Past performance does not guarantee future results. US stocks are represented by the S&P 500; developed foreign markets by the Morgan Stanley Capital International (MSCI) EAFE Index of major stock markets in Europe, Australasia and the Far East, with countries weighted by market capitalization and currencies unhedged; and emerging markets by a Bernstein simulation through 1984, by the International Finance Corp. (IFC) World Bank Global Index from 1985 to 1987 (IFC Index was reconstructed for the period April–Dec 1984) and by the MSCI Emerging Markets Index thereafter. Global stocks comprise 70% S&P 500, 25% EAFE, and 5% MSCI Emerging Markets Index. An investor cannot invest directly in an index, and index performance does not represent the performance of any Alliance or Bernstein mutual fund. Source: Compustat, IFC, MSCI, Standard and Poor’s and AllianceBernstein Developed Foreign Emerging Markets US Emerging Markets Return US Stocks12.6%14.8% Global Stocks12.613.6 Developed Foreign11.616.4 Emerging Markets11.021.7 Annualized: 1976–2006 Risk  Global stocks produce strong returns with reduced risk…  …while underlying markets trade places Benefits of Global Diversification Growth of $1 US Stocks Global Stocks Developed Foreign Emerging Markets

14. Investments For Gift Planners 2007  Low correlation adds diversification Past performance does not guarantee future results. As of December 31, 2006 *MSCI All Country World Index **Correlation between the S&P 500 and other asset classes, which are calculated using monthly returns and are represented by the following—International: MSCI EAFE; Emerging Markets: MSCI Emerging Markets Index; Currency: exchange value of the US dollar against a broad group of foreign currencies from major markets. ***Currency data are through September 2006. Source: MSCI, Zephyr Style Advisor and AllianceBernstein  Over half of the world’s market capitalization is outside the US, including leaders in key industries Benefits of Global Diversification Correlations with US Stock Market:** 1990–2006 Emerging Markets No Correlation 0 High Correlation 1.0 Currency*** International Stocks: Market Value* Non-US Share of Industry* US 45% Non-US 55% Banking Energy Telecommunications Automobiles Real Estate 63% 83% 68% 91% 57%

15. Investments For Gift Planners 2007 US stocks are represented by the S&P 500; foreign stocks by the MSCI EAFE Index, with countries weighted by market capitalization and currencies unhedged. Source: Compustat, MSCI and AllianceBernstein Volatility of US/Foreign Stock Mixes % US Stocks1009080706050403020100 % Foreign Stocks0102030405060708090100 1990–2006

16. Investments For Gift Planners 2007  Reduce volatility  Increase predictability of beating market Why Style Diversification?

17. Investments For Gift Planners 2007 Value 17.3% REITs 17.1% Growth 13.4% Emerging 12.7% Foreign 8.2% Bonds 7.0% Growth 34.1% Value 18.8% Foreign 15.7% Bonds 5.7% Emerging 3.2% REITs (1.8)% 1992–961997–992000–06 REITs* 19.5% Bonds* 15.1% US Value Stocks* 14.5% Foreign Stocks* 6.2% US Growth Stocks* 5.3% Emerging Markets* (7.7)% Foreign 62.7% Value 25.6% Growth 23.8% Emerging 20.0% REITs 19.1% Bonds 18.6% Foreign 26.4% Emerging 26.3% Value 11.3% Growth 8.2% Bonds 5.3% REITs 4.6% Emerging 33.1% Growth 24.2% Bonds 13.1% Value 12.8% REITs 7.7% Foreign (1.7)% 1981–841985–861987–881989–91 Major Markets: Annualized Returns Past performance does not guarantee future results. *The following asset classes are represented by the respective indexes—REITs: National Association of Real Estate Investment Trusts (NAREIT) Index; Bonds: Lehman Brothers Aggregate Bond Index; US Value Stocks: Russell 1000 Value Index; Foreign Stocks: MSCI EAFE Index of major foreign markets, with countries weighted by market capitalization and currencies unhedged; US Growth Stocks: Russell 1000 Growth Index; Emerging Markets: 1985–87, IFC World Bank Global Index (1981–84, IFC Index reconstructed), MSCI Emerging Markets Index thereafter. An investor cannot invest directly in an index, and index performance does not represent the performance of any Alliance or Bernstein mutual fund. Source: IFC, Lehman Brothers, MSCI, NAREIT, Russell Investment Group and AllianceBernstein Best Performer Worst Performer REITs 22.3% Emerging 12.1% Value 7.8% Bonds 6.5% Foreign 4.4% Growth (4.9)% No Market Always Wins

18. Investments For Gift Planners 2007 I NVESTMENT C HALLENGE  Can you diversify your investments to increase return and reduce risk? Return Risk Investment Portfolio Return Risk

19. Investments For Gift Planners 2007 High Return Low Time Value Growth High Return Low Time $100 50/50 $121 $117 $112 Year 1Year 2  Combining imperfectly correlated assets—such as growth and value—smooths the return… Growth Value 50/50 Value/Growth Source: AllianceBernstein  …and with less volatility, you compound your gains Year 1 Year 2 Average Annual Return Full-Period Return 40% (20) 10 12 (10)% 30 10 17 15% 5 10 21 The Benefit of Combination 50/50 GrowthValue

20. Investments For Gift Planners 2007 Dec 1980–Sep 85Dec 1988–Nov 91 Dec 1991–Aug 93Sep 1993–Mar 2000 Past performance does not guarantee future results. These charts illustrate the growth of $1 invested over the indicated time frames. Growth stocks are represented by the top 30% of all stocks publicly traded on American exchanges, ranked by price-to-book ratios; value stocks by the bottom 30%. No fees or expenses are reflected in the above examples. Source: Fama/French and AllianceBernstein Apr 2000–Dec 06 Growth $1.38 Value $2.42 Growth $1.74 Value $1.31 $1 Growth $1.18 Value $1.63 $1 Value $2.27 Growth $4.34 $1 Value $1.90 Growth $0.86 $1 Growth and Value Have Traded Leadership US Stocks

21. Investments For Gift Planners 2007 One-Year PeriodsThree-Year PeriodsFive-Year Periods GrowthValue50/50 Past performance does not guarantee future results. Manager data based on the median US large-cap growth and the median US large-cap value manager returns from Mercer Investment Consulting’s universe for those managers whose track records begin no later than January 1981 (the inception of Mercer’s universe). Total number of managers is 43. Source: Mercer Investment Consulting GrowthValue50/50GrowthValue50/50 Power of Diversification % of Periods Ahead of S&P 500 1982–2006  A mix has beaten the market more often

22. Investments For Gift Planners 2007 100% Value 50/50 100% Growth 1960s1970s 1980s1990s 100% Growth 100% Value 50/50 Past performance does not guarantee future results. Growth stocks are represented by the top 30% of all stocks publicly traded on American exchanges, ranked by price-to-book ratios; value stocks are the bottom 30%. Source: Compustat; Fama/French; Roger G. Ibbotson and Rex A. Sinquefield, “Stocks, Bonds, Bills, and Inflation: Year-by-Year Historical Returns,” University of Chicago Press Journal of Business (January 1976); and AllianceBernstein The Power of Diversification: Risk and Return

23. Investments For Gift Planners 2007 The Power of Diversification Past performance does not guarantee future results. US stocks are represented by the S&P 500; diversified stocks by 35% Fama/French Growth, 35% Fama/French Value (growth stocks are the top 30% of all stocks publicly traded on American exchanges, ranked by price-to-book ratios; value stocks are the bottom 30%) and 30% international stocks, represented by the MSCI EAFE Index, with countries weighted by market capitalization and currencies unhedged; and bonds by five-year Treasuries. Source: Center for Research in Security Prices, Compustat, Fama/French, Federal Reserve, MSCI and AllianceBernstein 100% US Stocks 100% Stocks Diversified with Growth, Value, and International Diversifying US stocks with Value and Growth and adding international stocks raised return while reducing risk 60/40 stock/bond mix is the classic risk/return trade-off 60/40 100% Bonds 50/50 70/30 80/20 1970–2006

24. Investments For Gift Planners 2007  Reduce volatility  Provide stability of income  Preserve capital Why Bonds?

25. Investments For Gift Planners 2007  The pickup in return has been substantial at the shorter end of the spectrum...  …yet their risk has remained low Money Market0.0% Short Bonds—2 years0.0 Intermediate Bonds—6 years4.2 Long Bonds—30 years9.4 Past performance does not guarantee future results. *Expected returns based on 10-year averages for period ending December 2006 **Lehman Brothers municipal indexes were used to calculate the frequency of negative returns in one-year rolling returns for the period between January 1990 and December 2006. Source: Delphis Hanover Corp., Lehman Brothers, Municipal Market Data Corp. and AllianceBernstein Municipal Bonds: The Best Maturities Frequency of Negative Returns: 1990–2006** Municipal Expected Return* CashShortIntermediateLong +0.7% +1.1%

26. Investments For Gift Planners 2007 Factors Governing Bond Return: The Effects of Duration As of December 31, 2006 *AAA–insured municipal par bonds Source: AllianceBernstein Short Duration* Intermediate Duration* Duration1.3 Years1.3 Years4.1 Years4.1 Years × Change in Yield1.0%(1.0)%1.0%(1.0)% = Change in Price(1.3)%1.3% (4.1)%4.1% + Income3.53.53.73.7 = Total Return2.2%4.8%(0.4)%7.8%

27. Investments For Gift Planners 2007 Past performance does not guarantee future results. Source: Merrill Lynch and AllianceBernstein Rolling 12-Month Periods—Descending Order Rolling 12-Month Bond Returns Merrill Lynch 1–3-Year Index

28. Investments For Gift Planners 2007 Year-over-year changes in yield; past performance does not guarantee future results. Source: Lehman Brothers and AllianceBernstein Rolling 12-Month Bond Returns Lehman Brothers Gov’t/Corp Index Rolling 12-Month Periods—Descending Order

29. Investments For Gift Planners 2007  Long term: Beat inflation by 5 percentage points  Limit the annual loss potential to -10% Overall Objectives An Example

30. Investments For Gift Planners 2007 Bonds70% Bonds/ 30% Stocks 40% Bonds/ 60% Stocks Stocks Past performance does not guarantee future results. Bonds are represented by US long-term government bonds prior to 1972 and US intermediate government bonds thereafter; stocks by the S&P 500. Source: Bureau of Labor Statistics; Compustat; Roger G. Ibbotson and Rex A. Sinquefield, “Stocks, Bonds, Bills, and Inflation: Year-by-Year Historical Returns,” University of Chicago Press Journal of Business (January 1976); Lehman Brothers; and AllianceBernstein 1951–2006 Real (Above Inflation) Returns

31. Investments For Gift Planners 2007 19532.3%1.9%1.4%0.9%0.5%(1.0)% 19571.90.1(1.8)(3.6)(5.4)(10.8) 19622.40.8(0.7)(2.3)(3.9)(8.7) 1966(0.6)(1.9)(3.3)(4.7)(6.0)(10.1) 1969(6.0)(6.4)(6.7)(7.1)(7.5)(8.8) 1973(2.2)(4.0)(5.8)(7.6)(9.4)(14.7) 1974(3.7)(7.2)(10.6)(13.9)(17.1)(26.5) 1977(0.1)(1.1)(2.1)(3.1)(4.2)(7.2) 19815.94.32.81.2(0.4)(4.9) 19905.94.63.42.10.8(3.1) 20004.52.50.6(1.4)(3.3)(9.1) 20012.40.4(1.7)(3.7)(5.7)(11.9) 2002(0.4)(3.6)(6.9)(10.0)(13.1)(22.1) 1951–2006* 7.68.28.89.410.011.6 Growth of $100,000 $5.9 Mil. $8.3 Mil. $11.5 Mil. $15.7 Mil. $21.1 Mil. $48.3 Mil. Past performance does not guarantee future results. Stocks are represented by the S&P 500 Index; bonds are US long-term government bonds prior to 1972 and US intermediate government bonds thereafter. *Compound annualized return Source: Compustat; Roger G. Ibbotson and Rex A. Sinquefield, “Stocks, Bonds, Bills, and Inflation: Year-by-Year Historical Returns,” University of Chicago Press Journal of Business (January 1976); Lehman Brothers; Standard & Poor’s; and AllianceBernstein Performance During Down Stock Market Years 1951–2006 30% Stocks/ 70% Bonds 70/30 100% Stocks 60/4050/5040/60

32. Investments For Gift Planners 2007 Dec 1968–Jun 1970(8.0)%(14.6)%(16.7)%(18.9)%(21.0)%(23.1)%(29.1)% Jan 1973–Sep 19745.6(11.5)(16.7)(21.6)(26.2)(30.7)(42.7) Sep 1987–Nov 19872.3(7.8)(11.0)(14.2)(17.4)(20.5)(29.6) Apr 2000–Mar 200330.44.2(3.5)(10.8)(17.6)(24.0)(40.9) 70/30 100% Stocks 100% Bonds 60/4050/5040/6030/70 The Severity of Deep Bear Markets Peak to Trough Past performance does not guarantee future results. Stocks are represented by the S&P 500 Index; bonds by US long-term government bonds prior to 1972 and US intermediate government bonds thereafter. Source: Compustat; Roger G. Ibbotson and Rex A. Sinquefield, “Stocks, Bonds, Bills, and Inflation: Year-by-Year Historical Returns,” University of Chicago Press Journal of Business (January 1976); Lehman Brothers; Standard & Poor’s; and AllianceBernstein

33. Investments For Gift Planners 2007 100% Bonds 90% Bonds–10% Stocks 80% Bonds–20% Stocks 70% Bonds–30% Stocks 60% Bonds–40% Stocks 50% Bonds–50% Stocks 40% Bonds–60% Stocks 30% Bonds–70% Stocks 20% Bonds–80% Stocks 10% Bonds–90% Stocks 100% Stocks Best Year Worst Year Annualized ReturnVolatility Number of Loss Years Growth of $100,000 Past performance does not guarantee future results. Bonds are represented by Lehman Intermediate Governments; stocks by 70% S&P 500 and 30% MSCI EAFE Index, with countries weighted according to market capitalization and currencies unhedged. Source: Compustat, Lehman Brothers, MSCI, Standard & Poor’s and AllianceBernstein 25.4%(1.7)%8.0%5.5%1$1,315,570 24.3(1.2)8.45.511,517,101 23.2(0.7)8.86.021,734,438 24.3(2.7)9.26.931,965,851 26.4(6.0)9.58.042,208,929 28.5(9.2)9.89.352,460,553 30.6(12.5)10.110.762,716,890 32.7(15.7)10.412.262,973,416 34.9(19.0)10.613.773,224,969 37.0(22.2)10.815.373,465,841 39.1(25.5)11.016.973,689,911 1973–2006 Global Balanced Portfolios

34. Investments For Gift Planners 2007 Nov1948–May 19497(10.0)%42.4%411 Jan1953–Aug 19538(8.7)35.0513 Aug1957–Dec 19575(15.0)43.4712 Jan1960–Oct196010(8.4)32.6212 Jan1962–Jun19626(22.3)31.21016 Feb1966–Sep 19668(15.6)30.6614 Dec1968–Jun197019(29.1)41.8928 Jan1973–Sep 197421(42.7)38.22142 Jan1977–Feb197814(14.2)16.5519 Dec1980–Jul198220(17.2)59.5323 Sep1987–Nov 19873(29.6)23.41821 Jun1990–Oct19905(14.7)33.549 Apr 2000–Mar200336(40.9) 35.12157 Average12(20.6)%35.6%921 Length (Months) First Year After Decline End of Bear Market Start of Bear Market Bear Markets Past performance does not guarantee future results. Source: Compustat; Roger G. Ibbotson and Rex A. Sinquefield, “Stocks, Bonds, Bills, and Inflation: Year-by-Year Historical Returns,” University of Chicago Press Journal of Business (January 1976); Standard & Poor’s; and AllianceBernstein Losses Have Usually Been Made Up Quickly Total Return (S&P 500) Months to Break Even

35. Investments For Gift Planners 2007  Institutional Asset Allocation, Spending Policies, Donor Recognition and the “Ask”  Charitable Remainder Trusts and Gift Annuities Special Gift Planning Considerations

36. Investments For Gift Planners 2007  Offers the potential of powerful diversification, lowering volatility and increasing return, BUT…  Hedge Funds: Too Much of a Good Thing? Alternative Investments

37. Investments For Gift Planners 2007 XYZZY Appendix #

38. Investments For Gift Planners 2007  Miss enough peaks and you lose all the advantage... S&P 500: 1926–2006 Average Monthly Return Full 972 months1.0% Best 60 months (6% of the time)12.0 All other months (94% of the time)0.3  …and both popular “market- timing” approaches have fallen short Strategy:* 1926–2006 Annualized Return Exit when market declines; 8.4%$57.7 Mil. stay out until market has a decent year Exit when market is “too high”; 8.462.1 stay out until after correction (a down year) Stay in market steadily, through ups and downs10.4257.5 Growth of $100,000 *The first timing approach involved switching from stocks to T-bills following any year in which the stock market declined and returning to stocks after the market earned at least 10% for a year. The second approach involved switching from stocks to T-bills following a combined two-year stock market rise of 40% or more and returning to stocks after the market declined for a year—or after two years, in any event. Source: Compustat; Roger G. Ibbotson and Rex A. Sinquefield, “Stocks, Bonds, Bills, and Inflation: Year-by-Year Historical Returns,” University of Chicago Press Journal of Business (January 1976); Lehman Brothers; Standard & Poor’s; and AllianceBernstein Market Timing Is Hazardous to Your Wealth