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

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.

15th Annual DC Planned Giving DaysMay 2007

What I Need to Know about Investing as a Gift Planner and Why

Donald Kent, PrincipalBernstein Global Wealth Management

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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?

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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

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Investment-Planning Policy

Establish time horizon

Understand the nature of risk

Create an asset balance that meets investment objectives

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Superior long-term returns historically

Short-term volatility mandates long-term investing

Past performance does not guarantee future results.

Why Stocks?

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$1Logscale

Inflation: $11

T-Bills: $22

Bonds: $71

Stocks: $3,071Annualized Returns1926–2006

Stocks 10.4%

Bonds 5.4

T-Bills 3.9

Inflation 3.0

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

26 34 43 52 61 79 88 97 0670

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(30)

(10)

10

30

50

26 42 58 74 90 06

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Average12%

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)%

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50 57 64 71 78 85 92 99 06

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)%


(15)%

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Average10%

Five-Year Losses Have Been Rare

(50)

(30)

(10)

10

30

50

26 34 42 50 58 66 74 82 90 98 06

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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

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10

20

30

26 34 42 50 58 66 74 82 90 98 06

Per

cent

0

10

20

30

26 34 42 50 58 66 74 82 90 98 06

Per

cent

0

10

20

30

26 34 42 50 58 66 74 82 90 98 06

Per

cent

Stocks Have Not Lost Money over the Long Term

S&P 500: Rolling Periods (Annualized)

Average11%

15 Years

Average11%

20 Years

Average11%

30 Years


Best Case 19%

Worst Case 1%

Best Case 18%

Worst Case 3%

Best Case 14%

Worst Case 8%

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Percent of Times Beating Inflation

1926–2006

Stocks 68% 90% 100%

T-Bills 64% 67% 68%

Bonds 62% 68% 69%

One Year 10 Years 20 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

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Low correlation to US markets

Access to successful markets/industries

Reduced volatility

Historical risk/return “sweet spot”

Why International?

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0

10

20

30

40

50

76 81 86 91 96 01 06

US

Dol

lars

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

DevelopedForeign

EmergingMarkets

US EmergingMarkets

ReturnUS Stocks 12.6% 14.8%Global Stocks 12.6 13.6Developed Foreign 11.6 16.4Emerging Markets 11.0 21.7

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 StocksGlobal Stocks

Developed ForeignEmerging Markets

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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*

US45%

Non-US55%

Banking

Energy

Telecommunications

Automobiles

Real Estate 63%

83%

68%

91%

57%

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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

12

13

14

15A

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%)

Volatility of US/Foreign Stock Mixes

% US Stocks 100 90 80 70 60 50 40 30 20 10 0

% Foreign Stocks 0 10 20 30 40 50 60 70 80 90 100

1990–2006

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Reduce volatility

Increase predictability of beating market

Why Style Diversification?

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Value17.3%

REITs17.1%

Growth13.4%

Emerging12.7%

Foreign8.2%

Bonds7.0%

Growth34.1%

Value18.8%

Foreign15.7%

Bonds5.7%

Emerging3.2%

REITs(1.8)%

1992–96 1997–99 2000–06

REITs*19.5%

Bonds*15.1%

US Value Stocks*14.5%

Foreign Stocks* 6.2%

US Growth Stocks*5.3%

Emerging Markets* (7.7)%

Foreign62.7%

Value25.6%

Growth23.8%

Emerging20.0%

REITs19.1%

Bonds18.6%

Foreign26.4%

Emerging26.3%

Value11.3%

Growth8.2%

Bonds5.3%

REITs4.6%

Emerging33.1%

Growth24.2%

Bonds13.1%

Value12.8%

REITs7.7%

Foreign(1.7)%

1981–84 1985–86 1987–88 1989–91

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

REITs22.3%

Emerging12.1%

Value7.8%

Bonds6.5%

Foreign4.4%

Growth(4.9)%

No Market Always Wins

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INVESTMENT CHALLENGE

Can you diversify your investments to increase return and reduce risk?

Return

Risk

InvestmentPortfolio

Return

Risk

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High

Return

LowTime

Value

Growth

High

Return

LowTime

$100

50/50$121$117$112

Year 1 Year 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

AverageAnnual Return

Full-Period Return

40%

(20)

10

12

(10)%

30

10

17

15%

5

10

21

The Benefit of Combination

50/50Growth Value

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Dec 1980–Sep 85 Dec 1988–Nov 91

Dec 1991–Aug 93 Sep 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

$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

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52%54% 56%

50% 49%54% 55%

62%

57%

One-Year Periods Three-Year Periods Five-Year Periods

GrowthValue 50/50

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

GrowthValue 50/50GrowthValue 50/50

Power of Diversification

% of Periods Ahead of S&P 5001982–2006

A mix has beaten the market more often

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16.5 17.0 17.5 18.0

Risk (%)

Re

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(%

)14

16

18

20

22

12.0 13.0 14.0 15.0

Risk (%)

Re

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(%

)14

16

18

20

22

14.0 16.0 18.0

Risk (%)

Re

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(%

)

7

9

11

13

12.5 13.0 13.5 14.0

Risk (%)

Re

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(%

)

100%Value

50/50

100%Growth

1960s 1970s

1980s 1990s

100%Growth

100%Growth

100%Growth

100%Value

100%Value

100%Value

50/50

50/5050/50

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

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4 6 8 10 12 14 16

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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 publiclytraded 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 withGrowth, 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

70/3080/20

1970–2006

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Reduce volatility

Provide stability of income

Preserve capital

Why Bonds?

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The pickup in return has been substantial at the shorter end of the spectrum...

…yet their risk has remained lowMoney Market 0.0%

Short Bonds—2 years 0.0

Intermediate Bonds—6 years 4.2

Long Bonds—30 years 9.4

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*

Cash Short Intermediate Long

+0.7%

+0.7%+1.1%

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Factors Governing Bond Return: The Effects of Duration

As of December 31, 2006*AAA–insured municipal par bondsSource: AllianceBernstein

ShortDuration*

Intermediate Duration*

Duration 1.3 Years 1.3 Years 4.1 Years 4.1 Years

× Change in Yield 1.0% (1.0)% 1.0% (1.0)%

= Change in Price (1.3)% 1.3% (4.1)% 4.1%

+ Income 3.5 3.5 3.7 3.7

= Total Return 2.2% 4.8% (0.4)% 7.8%

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1015202530

74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06

Pe

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Past performance does not guarantee future results.Source: Merrill Lynch and AllianceBernstein

(5)

0

5

1015

20

25

30

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Rolling 12-Month Periods—Descending Order

Rolling 12-Month Bond Returns

Merrill Lynch 1–3-Year Index

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74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06

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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

(20)

(10)

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10

20

30

40

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Rolling 12-Month Periods—Descending Order

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Long term: Beat inflation by 5 percentage points

Limit the annual loss potential to -10%

Overall Objectives

An Example

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1.7%

3.7%

5.6%

7.8%

Bonds 70% 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

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1953 2.3% 1.9% 1.4% 0.9% 0.5% (1.0)%

1957 1.9 0.1 (1.8) (3.6) (5.4) (10.8)

1962 2.4 0.8 (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)

1981 5.9 4.3 2.8 1.2 (0.4) (4.9)

1990 5.9 4.6 3.4 2.1 0.8 (3.1)

2000 4.5 2.5 0.6 (1.4) (3.3) (9.1)

2001 2.4 0.4 (1.7) (3.7) (5.7) (11.9)

2002 (0.4) (3.6) (6.9) (10.0) (13.1) (22.1)

1951–2006* 7.6 8.2 8.8 9.4 10.0 11.6

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 returnSource: 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

1951–200630% Stocks/70% Bonds 70/30

100%Stocks60/4050/5040/60

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Dec 1968–Jun 1970 (8.0)% (14.6)% (16.7)% (18.9)% (21.0)% (23.1)% (29.1)%

Jan 1973–Sep 1974 5.6 (11.5) (16.7) (21.6) (26.2) (30.7) (42.7)

Sep 1987–Nov 1987 2.3 (7.8) (11.0) (14.2) (17.4) (20.5) (29.6)

Apr 2000–Mar 2003 30.4 4.2 (3.5) (10.8) (17.6) (24.0) (40.9)

70/30100%

Stocks100% 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

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100% Bonds

90% Bonds–10% Stocks









100% Stocks

BestYear

WorstYear

AnnualizedReturn Volatility

Number ofLoss 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) 8.4 5.5 1 1,517,101

23.2 (0.7) 8.8 6.0 2 1,734,438

24.3 (2.7) 9.2 6.9 3 1,965,851

26.4 (6.0) 9.5 8.0 4 2,208,929

28.5 (9.2) 9.8 9.3 5 2,460,553

30.6 (12.5) 10.1 10.7 6 2,716,890

32.7 (15.7) 10.4 12.2 6 2,973,416

34.9 (19.0) 10.6 13.7 7 3,224,969

37.0 (22.2) 10.8 15.3 7 3,465,841

39.1 (25.5) 11.0 16.9 7 3,689,911

1973–2006

Global Balanced Portfolios

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Nov 1948–May 1949 7 (10.0)% 42.4% 4 11

Jan 1953–Aug 1953 8 (8.7) 35.0 5 13

Aug 1957–Dec 1957 5 (15.0) 43.4 7 12

Jan 1960–Oct 1960 10 (8.4) 32.6 2 12

Jan 1962–Jun 1962 6 (22.3) 31.2 10 16

Feb 1966–Sep 1966 8 (15.6) 30.6 6 14

Dec 1968–Jun 1970 19 (29.1) 41.8 9 28

Jan 1973–Sep 1974 21 (42.7) 38.2 21 42

Jan 1977–Feb 1978 14 (14.2) 16.5 5 19

Dec 1980–Jul 1982 20 (17.2) 59.5 3 23

Sep 1987–Nov 1987 3 (29.6) 23.4 18 21

Jun 1990–Oct 1990 5 (14.7) 33.5 4 9

Apr 2000–Mar 2003 36 (40.9) 35.1 21 57

Average 12 (20.6)% 35.6% 9 21

Length(Months)

First YearAfter Decline

End ofBear Market

Start ofBear MarketBear 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

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Institutional Asset Allocation, Spending Policies, Donor Recognition and the “Ask”

Charitable Remainder Trusts and Gift Annuities

Special Gift Planning Considerations

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Offers the potential of powerful diversification, lowering volatility and increasing return, BUT…

Hedge Funds: Too Much of a Good Thing?

Alternative Investments

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XYZZY

Appendix

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Miss enough peaks and you lose all the advantage...

S&P 500: 1926–2006Average

Monthly Return

Full 972 months 1.0%

Best 60 months (6% of the time) 12.0

All other months (94% of the time) 0.3

…and both popular “market-timing” approaches havefallen short

Strategy:* 1926–2006Annualized

Return

Exit when market declines; 8.4% $57.7 Mil.stay out until market has a decent year

Exit when market is “too high”; 8.4 62.1stay out until after correction (a down year)

Stay in market steadily, through ups and downs 10.4 257.5

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

Documents

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