1. SWE-EFI Board of Trustees Annual Meeting with SWE Nov 2008

2. Annual Member Meeting with SWE Board of Directors per SWE-EFI Bylaws Reports of the: SWE-EFI Board of Trustees and SWE Board of Trustees for CRF TRUSTEES REPORTS

3. Carolyn Phillips, Chair, Houston Area Marge Inden, Treasurer, Baltimore-Washington Kathryn Cunningham, Secretary, Chicago Regional Dorothy Morris, NJ (resigned 5/08) Michele Fitzpatrick, New England Shoreline Jeff Brody, Mid-Hudson Angela Nickels, SW Texas (App’td 6/08) Who We Are

4. A.Scholarship Procedure: B.Inconsistency had been a continuing issue. Working with SC/HQ/Siddika to define a complete process, in writing, almost there – a few items remain Accomplishments

5. Inform A.Investment Policy/account B.Gift Acceptance – joint C.Travel policy for BOT D.Record Retention – in progress E.Reviewing SWE whistleblower policy F.Conflict of Interest Policy Accomplishments

6. Inform A.5/2008 adopted UPMIFA: B.“Uniform Prudent Management of Institutional Funds Act” C.Uniform and fundamental rules of investing funds by a charity D.Per District of Columbia Act 11/2007 (incorporation) E.Written by: NCCUSL Accomplishments

7. Questions??? UPMIFA adopts the prudence standard for investment decision making that gives governing boards and institutionally related foundation boards more flexibility in making investment and expenditure decisions within the general standard of prudence. What UPMIFA Means for Boards

8. Inform Permanent Restricted assets – decided by donor Temporarily restricted assets – Decided by Trustees Have long term time horizon Purchasing power needs to be preserved – i.e. inflation factor Endowments

9. Inform Preservation of Principal: Diversified asset portfolio expected to produce average annual return at least = inflation plus endowment payout without undue risk Endowments

10. Inform Total Return = payout + expenses + inflation/growth of endowment Endowments

11. ENDOWMENTS Spending Policy or payout rate: The commonly recommended spending policy is one that sets a % of net asset value of portfolio each year regardless of current income Goal -maximize total return and minimize risk. Endowment Payouts

12. ENDOWMENTS Spending Policy/Payout Rate: College Endowments typically payout 4-5% based on 3 year rolling average Some payout rates include costs, some do not (SWE-EFI does not) Payouts Benchmarking

13. ENDOWMENTS Verity & Thayer paper (1995) on Foundations: “A spending policy determines how much to spend for present-day needs and how much to reinvest to preserve future spending power” “Annual spending rates of 5% are considered high and may result in negative growth of fund values” Payouts Benchmarking

14. ENDOWMENTS Common Fund Benchmark Study of Foundations (June 2008): “Spending much in excess of 5% tends to erode the endowment, especially after inflation and expenses are factored in” Payouts Benchmarking

15. Questions??? HQ fund pays out at 4% plus BoT Expenses (admin and travel) Audit costs for SWE-EFI up significantly with new auditor >25% increase The auditor required more work by not accepting Quickbooks (cost us more) Need earlier involvement of BoT Treasurer and better audit procedure Spending Policy

16. Questions??? SWE-EFI uses a 4% payout rate that is evaluated annually [i.e. $25,000 endowment pays a $1000 stipend, 25:1] SWE uses 20:1 ratio for Life Membership Fees that feed HQ fund Spending Policy

17. FunFund FY06 <EFI FY05 <EFI FYO6FY07FY08 Awards 374397407449439 HQ 14211636163718641630 Scholar 25153098353838323731 Total 43105131528261455800 Fund Balances $K 6/30

18. Questions??? FYO6FY07FYO8FY09 Total Stipend $K 115122135149 Section & Region Stipends $K 5.5 1211* Scholarship Stipends * One reverted to a national selection

19. FunFund CY 20O6 CY 2007 CY ¾ 2008 Awards15.37.2 (10.5) HQ13.20.9 (14.4) Scholar12.33.6 (12.6) Investment Returns % CY = calendar year

20. FunFund Sept 30 2008 FY2009 1stQ Awards(6.3) HQ(9.0) Scholar(8.8) Investment Returns FY09

21. Questions??? Continuing to evaluate external investment management Researched and/or interviewed different types of managers – brokerage firms, endowment managers, indexing, etc. Second meeting - Common Fund If go outside–when is right time? Current Activity

22. Questions??? Good track record @ SWE-EFI But self management not common Fiduciary duty to act prudently - professional management most common method Difficulty attracting new trustees with right skill sets “Manager” expense increases costs Performance not likely to go up Notes: Why Activity? What Impact?

23. SWE Board of Trustees CONTINGENCY RESERVE FUND

24. Questions??? Contingency Reserve FY05FY06FY07FY08 Fund Balance 2260277733013281 SWE GOR 273935143619? % ratio 927991

25. Questions??? % CY06CY07CY08 end 3 rd Q Fund Return 11.02.1(12.6) Blended Benchmark 9.46.3(8.3) Contingency Fund Returns

26. Questions???

28. REPORTS