Endowment TrusteesReport to Council

(Long-Term Investment Fund)

Philadelphia, PA

2007 - 08 ET #6.42007 - 08 EBD #13.1(2007-08 Midwinter Meeting)

Robert Newlen - ChairSunday – January 13, 2008

Market Flash Points

• Housing woes and troubles with mortgage backed securities spilled over into the broader credit markets.

• Worries of a possible recession continue to persist• Overseas markets continue to outperform US

markets.• The dollar lost 7.5% of its value in 2007 against a

group of 26 securities. It now stands at its lowest level in a decade. Weakening continues.

• Corporate profits shrank in the third quarter for the first time since early 2002.

• Volatility continues to be extreme.

Exhibit #1

Market and Book Value @ 12-31-07

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

Market Value Book Value

($000’s)

Exhibit #2

*Millions

Endowment Fund Manager Allocation & Style @ 12-31-07

$31,221,422

BlackrockLarge Cap

SRI$257,624

.8%

HeitmanREIT

$1,404,9334.5%

AllianceLarge Cap

Core4,579,552

14.7%LazardInternational$4,074,253

13.0%

BlackrockLarge Cap

Value$3,375,056

10.8%

MarsicoLarge Cap

Growth$5,592,780

17.9%

NFJSmall Cap

$1,445,6004.6%

PimcoFixed Income$10,232,874

32.8%

Ariel$258,750

.8%

Exhibit #3

Asset Allocation Strategy Exhibit #4

Min Target Actual Max12/31/2006

Domestic Large/Medium Cap Stocks 43% 40% 45% 45% 50%Alliance Bernstein - Core 17% 14.7%Ariel Captial 1% 0.8%

Marsico - Large Cap Growth 15% 17.9%

Blackrock - Large Cap SRI 0% 0.8%Blackrock - Large Cap Value 11% 10.8%

Domestic Small/Medium Cap Stocks 9% 0% 5% 5% 10%NFJ - Small Cap Value 9% 4.6%

International Equity 13% 5% 10% 13% 15%

Lazard - International 13% 13.0%

Real Estate Investment Trust (REIT) 6% 5% 10% 5% 15%Heitman 6% 4.5%

Investment Grade Fixed Income 29% 22.5% 30% 32% 37.5%PIMCO - Bonds 29% 32.8%

Cash and Cash Equivalents 0% 0% 0% 0% 5%

POLICY GUIDELINES @ 12-31-07ASSET ALLOCATION STRATEGY

Performance – 12/31/07 (YTD Returns)

Managers Market Value Returns IndexAlliance 4,579,552$ 14.3% 5.5%Marsico 5,592,780$ 14.1% 11.8%Blackrock LCV 3,375,056$ 2.5% -0.4%NFJ 1,445,600$ 4.3% -9.8%Blackrock SRI 257,624$ 3.3% 1.3%Lazard 4,074,253$ 8.6% 11.2%Heitman 1,404,933$ -16.8% -17.7%PIMCO 10,232,874$ 9.3% 7.0%

Merrill Lynch 30,962,672$

Ariel Capital 258,750$ -1.4% -1.4%/ 4.5%/ 3.7%*

Composite 31,221,422$ 8.4% 6.5%**

Exhibit #5

*Returns for Russell 1000 Mid Cap value – Ariel Mgt. choice, KLD Social Select and Domini 400 Social indexes respectively

**These returns are unaudited. Composite benchmark is 55% Russell 3000, 10% MSCI EAFE and 35% ML Domestic Master

Long-Term Investment Manager Performance @ 12-31-07 (Annualized)

1 Year 3 Year 5 Year

Alliance Bernstein 14.1% 9.4% 16.4%

S&P 500 5.5% 8.6% 12.8%

Marsico 14.3% 9.7% 14.5%

Russell 1000 Grow th 11.8% 8.7% 12.1%

Blackrock* NA NA NA

Russell 1000 Value -0.2% 9.3% 14.6%

ALA Endow ment 8.4% 9.0% 11.8%

ALA Benchmark 6.5% 8.3% 11.2%

Exhibit #6

*12/31/07 information not yet available.

Long-Term Investment Manager Performance @ 12-31-07 (Annualized)

1 Year 3 Year 5 YearNFJ 4.3% 13.6% 18.8%Russell 2000 Value -9.8% 5.3% 15.8%0.0%Lazard 8.8% 13.8% 17.8%MSCI EAFE 11.6% 17.3% 22.1%

Heitman -16.8% 8.2% 18.9%

DJ Wilshire RESI -17.7% 8.4% 18.6%

Pimco 9.5% 5.7% 5.4%ML US Broad Mkt 7.0% 4.6% 4.4%

Exhibit #6a

Long-Term Investment Manager Performance – SRI @ 12-31-07 (Annualized)

1 Year 3 Year 5 YearBlackrock SRI 10.6% 10.5% 13.8%

Ariel Capital Appreciation -1.4% 4.0% 10.8%Russell 1000 Mid Cap Value* -1.4% 10.1% 17.9%Domini 400 Social Index** 3.7% 6.6% 11.4%KLD Social Select Index*** 4.5% 7.2% NA

**M os t c ommonl y known SR I i ndex i n the i ndus tr y - equi val ent to S&P 500

***SR I I nves tment I ndus tr y Spec i fi c I ndex - K LD devel oped an as s et c ategor y s pec i fi c i ndex, whi c h tr ac ks

the R us s el l 1000

*I nves tment I ndus tr y Spec i fi c I ndex - thi s i s A r i el 's c hoi c e to meas ur e thei r per f or manc e. T hi s i ndex i s not

SR I c enter ed

Exhibit #7

Thank You for Your Attention