Tiya Lim, Director of Institutional Advisory Services

1. Making Cents in a Volatile Endowment Market February 28, 2012 Tiya Lim, Director of Institutional Advisory Services

2. Agenda • History of Spending Policies • Various Methodologies • Recommendations • Q&A 11.07.11

3. History of Spending PoliciesOverview 2000s: Hybrid Methods Earliest endowments invested in land 1972: UMIFA — Total Return 1950s–60s: Stock markets boom + high inflation 1900s: Investments primarily fixed income — spent interest 2006: UPMIFA — eliminates HDV Source: Endowment Spending Policies Since the Passage of UPMIFA. Callan Investments Institute Research, April 2010. Source for S&P 500 Index returns: Dimensional Fund Advisors. Indices are not available for direct investment, Their performance does not reflect the expenses associated with the management of an actual portfolio nor do indices represent results of actual trading. Information from sources deemed reliable, but its accuracy cannot be guaranteed. Performance is historical and does not guarantee future results. 3 02.01.12

4. Various Methodologies Inflation-Based Simple Smoothing Moving average Spending reserve Stabilization fund Income-based Fixed rate Fixed amount Inflation-protected Inflation-banded Hybrid Weighted average “Yale Rule” 01.04.12

5. Various Methodologies Comparison Moving Average Yale Rule • Description • (80% x prior year’s spending + inflation) + (20% x policy rate x portfolio value) • Pros • Predictable, smooth spending • Conscious of market values • Flexible • Cons • Finding the right combination for a specific institution and sticking with it Description Specified percentage based on a moving average Pros Predictable, smooth spending Cons Can overspend when markets underperform and underspend when markets do well 01.04.12

6. Various Methodologies $10 Million Portfolio + 5% Spending Policy For illustrative purposes only. Source: Dimensional Fund Advisors. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio nor do indices represent results of actual trading. Information from sources deemed reliable, but its accuracy cannot be guaranteed. Performance is historical and does not guarantee future results. Based on annual returns for 60 percent S&P 500 Index and 40 percent Barclay’s Intermediate/Government Credit Bond Index. Assumes initial portfolio is $10 million. 6 02.01.12

7. Various Methodologies Comparison For illustrative purposes only. Source: Dimensional Fund Advisors. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio nor do indices represent results of actual trading. Information from sources deemed reliable, but its accuracy cannot be guaranteed. Performance is historical and does not guarantee future results. Based on annual returns for 60 percent S&P 500 Index and 40 percent Barclay’s Intermediate/Government Credit Bond Index. Assumes initial portfolio is $10 million. 7 02.01.12

8. Various Methodologies Comparison For illustrative purposes only. Source: Dimensional Fund Advisors. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio nor do indices represent results of actual trading. Information from sources deemed reliable, but its accuracy cannot be guaranteed. Performance is historical and does not guarantee future results. Based on annual returns for 60 percent S&P 500 Index and 40 percent Barclay’s Intermediate/Government Credit Bond Index. Assumes initial portfolio is $10 million. Hybrid is 80% previous year + inflation (set at 3 percent) and 20 percent of 5 percent market value. 8 02.01.12

9. Recommendations Risk Tolerance Ability Willingness Need • Mission and Program Goals • Spending Policy • Time Horizon • Stability of Revenue • Sleep Test 01.04.12

10. Recommendations Asset Allocation and Spending Study The above example is for illustrative purposes only. 01.04.12

11. Recommendations • Reflect philosophy of sponsor • Prioritize objectives 01.31.12

12. RecommendationsCompeting Objectives 01.31.12

13. RecommendationsSummary • Align with objectives • Consider asset allocation and risk profile • Review annually • Change in mission or objectives • Large donation or distribution • Significant market impact • Legal changes 01.31.12

14. Questions? 14 11.07.11

15. About Buckingham Asset Management • Headquarters in St. Louis • Fee-only Registered Investment Advisor firm, founded in 1994 • Buckingham manages more than $3 billion of client assets • Clients range from individuals, businesses, trusts, partnerships, nonprofit organizations and retirement plans • Buckingham Institutional Advisory Services manages approximately $300 million in assets • Our sister firm is the back office to more than 120 Registered Investment Advisor firms, which manage more than $10 billion of their own clients’ assets1 Asset reports as of December 31, 2011. 1BAM Advisor Services is an affiliated company of Buckingham Asset Management. BAM Advisor Services acts as a service provider to independent Registered Investment Advisor firms. 01.11.12

16. Institutional ExperiencePartial Institutional Client List (permission granted to use their names) • Contemporary Art Museum of St. Louis • Forsyth School, St. Louis • Hannibal Regional Hospital, Hannibal, Mo. • Lincoln Community Foundation, Lincoln, Neb. • Missouri Society of CPAs • Opera Theatre of St. Louis • Saint Louis Art Museum • South Florida Council — Boy Scouts of America, Miami Lakes, Fla. • The Seagraves Family Foundation, Twin Falls, Idaho • The Society of St. Vincent de Paul — National Council of the U.S. • Visitation Academy of St. Louis County 01.09.12

17. About the Speaker • Tiya Lim is director of institutional advisory services at Buckingham Asset Management, LLC. In this role, she is responsible for leading Buckingham’s business development, operations and service offering to institutions and not-for-profit organizations. • Additionally, Tiya concentrates on investment policies for the firm and investment strategies for individual and institutional clients. She focuses much of her study on not-for-profit best practices and Social Security and other retirement-related strategies. Her work on Social Security has been featured on CBS MoneyWatch.com and cited in the Journal of Financial Planning. • Tiya holds an MBA from the University of Chicago and a bachelor’s degree from the Wharton School of the University of Pennsylvania in Philadelphia. 01.04.12

18. Building Relationships by Doing the Right Thing® Do the right thing. Simple but powerful. The cornerstone of how our firm was founded and built — the heart of our business, the methodology for our actions. A team, pulling together, doing the right thing — the essence of who we are. The Buckingham Family is passionate about … Operating at the highest level of integrity and trust Providing superior client service Being an indispensable strategic partner to our clients Providing quality, customized investment solutions  Building a quality organization  Our future 01.04.12