Endowment TrusteesReport to Executive Board

(Long-Term Investment Fund)

Chicago, Ill

2007 - 08 ET #6.52007 - 08 EBD #13.2(2007-08 Spring Meeting)

Robert Newlen - ChairSaturday – April 12, 2008

Market Flash Points

• Consumer confidence reaches a 35 year low

• Home prices fall a record 10.7% in 2007

• Case-Shiller home price index for the 20 largest cities show declines for 18th consecutive month

• The Probability of slowing growth and rising inflation ie Stagflation, is increasing

• Private sector job losses in February reported @ 101,000

• The Federal Reserve and JP Morgan bailout of Bear Stearns averts a potential financial system meltdown

Investment Process

Investment Policy Statement (revised Dec 2007) provides detailed guidelines to the Endowment Trustees for management and review of the 8 Money Managers & one Mutual Fund deployed for managing the assets of the Endowment Fund.

(1) Each Portfolio Manager is asked to present their account to the Trustees in the scheduled Monthly Conference Calls. (Over 7 calls were held last year)

(2) Portfolio managers performance is reviewed with the help of an Institutional Consultant in these conference calls. (2 New Managers were hired in the last 18 months)

(3) The ALA Investment Policy Statement provides detailed criteria for hiring and firing Money Managers for the Endowment Account.

Tactical Asset Allocation Changes

• Gradually increased Fixed Income allocation from an underweight 27% in 2005 to the current 36% overweight position

• Reduced REITs (Real Estate Investment Trusts) to the minimum weighting of 5% in 2005.

• Took Small Cap from an overweight of 9% to a neutral target weight of 5% in 2007.

• Kept Large Cap near its target weight but shifted the overweight in Large Cap Value to the current overweight in Large Cap Growth in 2006 & 2007.

The Endowment Trustees, at the advice of the Consultants have made several asset allocation decisions over the last year for the benefit of the Endowment:

Asset Allocation Strategy Exhibit #1

Min Target Actual Max12/31/2007

Domestic Large/Medium Cap Stocks 45% 40% 45% 41.7% 50%Alliance Bernstein - Core 14% 13.8%Ariel Captial 1% 0.8%

Marsico - Large Cap Growth 18% 16.5%

Blackrock - Large Cap SRI 1% 0.8%Blackrock - Large Cap Value 11% 9.8%

Domestic Small/Medium Cap Stocks 5% 0% 5% 5% 10%NFJ - Small Cap Value 5% 4.8%

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

Lazard - International 13% 12.8%

Real Estate Investment Trust (REIT) 5% 5% 10% 5% 15%Heitman 5% 4.9%

Investment Grade Fixed Income 32% 22.5% 30% 36% 37.5%PIMCO - Bonds 33% 35.8%

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

POLICY GUIDELINES @ 3-31-07ASSET ALLOCATION STRATEGY

Market and Book Value @ 3-31-08

$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 Allocation

Equity$18,805,887

64.2%

Fixed Income$10,501,701

35.8%

Equity Fixed Income

Exhibit #3

Endowment Fund Manager Allocation & Style @ 3-31-08

$29,307,588

BlackrockLarge Cap

SRI$230,407

.8%

HeitmanREIT

$1,427,8814.9%

AllianceLarge Cap

Core4,031,300

13.8%Lazard

International$3,765,099

12.8%

BlackrockLarge Cap

Value$2,868,981

9.8%

MarsicoLarge Cap

Growth$4,844,977

16.5%

NFJSmall Cap

$1,402,3474.8%

PimcoFixed Income$10,501,701

35.8%

Ariel$234,895

.8%

Exhibit #4

Performance – 3/31/08 (YTD Returns)

Managers Market Value Returns IndexA lliance 4,031,300$ -11.9% -9.5%Marsico 4,844,977$ -13.2% -10.2%Blackrock LCV 2,868,981$ -14.8% -9.0%NFJ 1,402,347$ -2.3% -6.5%Blackrock SRI 230,407$ -10.3% -9.4%Lazard 3,765,099$ -7.4% -9.5%Heitman 1,427,881$ 1.8% 2.1%PIMCO 10,501,701$ 2.8% 2.1%

Merrill Lynch 29,072,693$

A riel Capital 234,895$ -9.2% -8.6%/ -8.2%/ -9.4%*

Composite 29,307,588$ -5.8% -5.3%

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)

1st Qtr 08 1 Year 3 Year 5 Year

Alliance Bernste in -11.9% 14.1% 9.4% 16.4%

S&P 500 -9.5% 5.5% 8.6% 12.8%

Marsico -13.2% 14.3% 9.7% 14.5%

Russell 1000 Grow th -10.2% 11.8% 8.7% 12.1%

Blackrock* -14.8% NA NA NA

Russell 1000 Value -9.0% -0.2% 9.3% 14.6%

ALA Endow m ent -5.8% 8.4% 9.0% 11.8%

ALA Benchm ark -5.3% 6.5% 8.3% 11.2%

Exhibit #6

*12/31/07 information not yet available.

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

1st Qtr 08 1 Year 3 Year 5 Year

NFJ -2.3% 4.3% 13.6% 18.8%Russell 2000 Value -6.5% -9.8% 5.3% 15.8%0.0%Lazard -7.4% 8.8% 13.8% 17.8%MSCI EAFE -9.5% 11.6% 17.3% 22.1%

Heitman 1.8% -16.8% 8.2% 18.9%

DJ Wilshire RESI 2.1% -17.7% 8.4% 18.6%

Pimco 2.8% 9.5% 5.7% 5.4%ML US Broad Mkt 2.1% 7.0% 4.6% 4.4%

Exhibit #7

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

1st Qtr 08 1 Year 3 Year 5 YearBlackrock SRI -10.3% 10.6% 10.5% 13.8%KLD Social Select Index -8.2% 4.5% 7.2% NA

Ariel Capital Appreciation -9.2% -1.4% 4.0% 10.8%Russell 1000 Mid Cap Value* -8.6% -1.4% 10.1% 17.9%Domini 400 Social Index** -9.4% 3.7% 6.6% 11.4%KLD Social Select Index*** -8.2% 4.5% 7.2% NA

**M os t c ommonl y k nown SR I i nde x i n the i ndus t r y - e qui v a l e nt to S&P 500

***SR I I nv e s tme nt I ndus t r y Spe c i fi c I nde x - K L D de v e l ope d a n a s s e t c a te gor y s pe c i fi c i nde x , whi c h t r a c k s the

R us s e l l 1000

*I nv e s tme nt I ndus t r y Spe c i fi c I nde x - th i s i s A r i e l 's c ho i c e to me a s ur e the i r pe r f o r ma nc e . T hi s i nde x i s no t SR I

c e nte r e d

Exhibit #8

ALA Endowment Performance Exhibit #9

3/31/08 2007 2006 2005 2004 2003 1 Year 3 Years 5 Years

ALA Endowment (5.8) 8.4 10.9 7.8 13.3 18.9 8.4 9.0 11.8

ALA Benchmark (5.3) 6.6 12.7 5.7 10.1 21.9 6.6 8.3 11.2

Source: Merrill Lynch 12/31/07 AIM Report

ALA Benchmark: 55% Russell 3000, 10% MSCI EAFE, 35% ML Domestic Master

Annualized (12-31-07)

Thank You for Your Attention