1. © 2007 Northern Trust Corporation northerntrust.com The Northern Experience A C C E S S. E X P E R T I S E. S E R V I C E. © 2007 Northern Trust Corporation northerntrust.com The Golden Age of Philanthropy – Opportunities for Advisors and Clients to Make a Difference September 11, 2007 Marguerite H. Griffin Senior Vice President

2. 2 The Northern Experience A C C E S S. E X P E R T I S E. S E R V I C E. Summary  The Golden Age of Philanthropy – Current Trends  The “New” Philanthropist  The Role of the Advisor  Starting the Conversation  Opportunities for Advisors and Clients to Make a Difference  Northern Trust’s Philanthropic Services “Giving should be entered into in just the same careful way as investing… giving is investing.” –John D. Rockefeller The Golden Age of Philanthropy – Opportunities for Advisors and Clients to Make a Difference

3. 3 The Northern Experience A C C E S S. E X P E R T I S E. S E R V I C E. The Golden Age of Philanthropy – Opportunities for Advisors and Clients to Make a Difference

4. 4 The Northern Experience A C C E S S. E X P E R T I S E. S E R V I C E. The Golden Age of Philanthropy – Current Trends Donors gave an estimated $295.02 billion in 2006; giving by individuals accounted for $222.89 billion; charitable bequests totaled $22.91 billion $41 trillion (in 1998 dollars) will be transferred from one generation to the next by 2052; $6 trillion is earmarked for charitable giving There are approximately 80,000 donor advised funds and 64,000 private foundations Charitable lead trusts have become the fastest growing split-interest charitable vehicle High-profile donors are contributing to a kind of “trickle-down” generosity Sources: The Chronicle of Philanthropy; Havens and Schervish, 2003; Tax Stats at irs.gov.

5. 5 The Northern Experience A C C E S S. E X P E R T I S E. S E R V I C E. The Golden Age of Philanthropy – Current Trends (cont.) Increasingly, charitably-minded individuals are “giving while living” Philanthropy is being used to teach the next generation financial stewardship Information about charitable giving and philanthropy is abundant and can be confusing to clients With 1.4 million 501(c)(3) charities, consolidation within the nonprofit community will continue Sector governance and federal oversight will continue to be important to donors and nonprofit organizations

6. 6 The Northern Experience A C C E S S. E X P E R T I S E. S E R V I C E. The “New” Philanthropist Donors want to include children and grandchildren in philanthropic goals Donors want to move beyond simply “giving” and seek to solve intractable social problems Generations X and Y have embraced bold and unconventional methods of giving Donors want to be involved in more national and international giving; “community” has been redefined

7. 7 The Northern Experience A C C E S S. E X P E R T I S E. S E R V I C E. The “New” Philanthropist (cont.) Donor-designated contributions and anonymous giving has increased dramatically Donors increasingly seek transactional efficiency when making charitable gifts Donors are concerned with their fiduciary responsibilities as board members and trustees of charitable organizations Donors are outcomes-oriented and want to see evidence of efficient service delivery, low program expenses and relevant community programs

8. 8 The Northern Experience A C C E S S. E X P E R T I S E. S E R V I C E. The Role of the Advisor Move through obstacles to create opportunities Discuss giving in the same way you discuss financial issues Understand the motivations for giving; engage in a discussion regarding values Include a discussion of philanthropy in an annual review process or before an expected liquidity event Share personal charitable inclinations with clients

9. 9 The Northern Experience A C C E S S. E X P E R T I S E. S E R V I C E. Starting the Conversation How much is enough? How much is surplus?  During your life  To leave to your family  To leave to charity What are your values? Have you discussed them with your family? What motivates you to give your money and time? Describe your current and past charitable giving and volunteer activities. If your financial resources were unlimited, how would you spend your time and what would you do with your excess financial resources? What (charitable) legacy do you want to leave for your family and community?

10. 10 The Northern Experience A C C E S S. E X P E R T I S E. S E R V I C E. Opportunities for Advisors and Clients to Make a Difference Encourage clients to think and act strategically, rather than tactically Engage clients in a risk/return analysis of their “philanthropic investments” Understand the diversity of giving resources and strategies Integrate charitable giving with overall wealth transfer planning Coordinate efforts with other centers of influence Understand the role of philanthropic consultants, who help clients  Develop philanthropic mission statements  Establish grant guidelines and operating procedures  Evaluate grant requests  Connect donor with other funders with similar interests  Develop strategies for leadership succession

11. 11 The Northern Experience A C C E S S. E X P E R T I S E. S E R V I C E. Northern Trust’s Philanthropic Services Define and clarify philanthropic goals and articulate mission statement for charitable giving activities Explore various giving options Consult with tax and estate planning professionals to implement and maximize their giving Decide how much and which assets to give Decide whether to give outright or in trust, during the client’s lifetime or through a testamentary transfer Decide how to involve family or friends in the giving process Consultative Services for Individuals and Families Northern Trust professionals help our clients identify and refine their philanthropic goals and help implement an effective, long-term charitable giving strategy to achieve their objectives. In developing a charitable giving strategy, we help each client:

12. 12 The Northern Experience A C C E S S. E X P E R T I S E. S E R V I C E. Northern Trust’s Philanthropic Services Develop board practices and procedures to ensure sound organizational management Examine trends in charitable giving that are relevant to programmatic and fundraising goals Explore effective fundraising and volunteer development activities Consult with nonprofit executives and directors regarding planned giving programs for affluent donors Develop gift acceptance and spending policies that are appropriate for endowments and capital campaigns Northern Trust professionals will assist executives and directors of nonprofit organizations and endowments to identify long-term development, marketing and strategic planning opportunities for improved donor relations and fundraising initiatives. We help our clients: Consultative Services for Nonprofit Organizations and Endowments

13. 13 The Northern Experience A C C E S S. E X P E R T I S E. S E R V I C E. Give clients the freedom to focus on what matters most Execute philanthropic strategy Fund charitable vehicle(s) of choice and manage assets Northern Trust’s Philanthropic Services Develop tailored philanthropic strategies and solutions that support overall wealth planning goals Engage clients in discussions regarding charitable giving and philanthropy Provide resources and intellectual capital on charitable giving

14. 14 The Northern Experience A C C E S S. E X P E R T I S E. S E R V I C E. Resources  Doing Well by Doing Good – Improving Client Service, Increasing Philanthropic Capital: The Legal and Financial Advisor’s Role, The Philanthropic Initiative, Inc., 2000.  Diversity of Giving: Establishing Your Charitable Legacy, a 3-part series www.northerntrust.com www.northerntrust.com  The Chronicle of Philanthropy www.philanthropy.com – The newspaper of the nonprofit sector.www.philanthropy.com  Council on Foundations www.cof.org – A membership organization of more than 2,000 grant-making foundations and giving programs worldwide.www.cof.org  GuideStar www.guidestar.org – GuideStar’s searchable database provides information that can be sued to verify nonprofit status of organizations, to obtain contact information and review Forms 990.www.guidestar.org  Association of Small Foundations www.smallfoundations.org – A membership organization which supports more than 60,000 smaller (family) foundations.www.smallfoundations.org  National Center for Family Philanthropy www.ncfp.org – Promotes philanthropic values, vision and excellence across generations of donors and donor families.www.ncfp.org  Arabella Philanthropic Advisors www.arabellaadvisors.com.www.arabellaadvisors.com  Rockefeller Philanthropy Advisors www.rockpa.org.www.rockpa.org  Strategic Philanthropy www.stratphilanthropy.com.www.stratphilanthropy.com The Golden Age of Philanthropy – Opportunities for Advisors and Clients to Make a Difference