The endowment was founded in 1937 by J. K. Lilly Sr. and his sons Eli and J. K. Jr., with gifts of stock in the pharmaceutical company Eli Lilly and Company. While stock in the company is the Endowment's foremost asset, the Endowment is separate from the company. The Endowment, a private foundation, is in a different location, has a different board of directors, and is not linked to the company, except for the significant percentage of the company's stock it holds. The foundation has historically had three primary areas of grantmaking: community development, education and religion. Lilly Endowment is unique in that it is the largest private foundation in the United States that funds almost exclusively in its home city and state.
One of the Endowment's most remarkable achievements has been its Giving Indiana Funds for Tomorrow (GIFT) initiative. Over the last 15 years, this initiative has been responsible for starting and growing Indiana community foundations. Today, Indiana has more community foundations than any other state. Total assets of these foundations are nearly $1.5 billion.
From its inception, Lilly Endowment has supported numerous religious endeavors. Among these was Eli Lilly's Christ Church, in which he was involved throughout his life, beginning as a choir boy. Upon his death, a contingency of the bequest to the church was that Christ Church would stay in the heart of downtown Indianapolis. Support of a wide variety of religious endeavors was a way for Lilly to encourage character development.
Other recipients of Lilly Endowments have included the Rockefeller funded and ecumenical Association of Theological Schools and also Search Institute which lists the following dates for receiving Lilly grants:
The Lilly Endowment's rejection of a much-hoped-for national training center for youth work professionals is a major disappointment.
Search Institute is a psychology based, not-for-profit, ecumenical Youth Research organization. It is supported by grants and contracts from foundations, corporations, and government agencies, proceeds from the sales of products and services, and tax-deductible contributions from individuals and organizations.
Another recipient of the Lilly Endowment has included the ecumenical Christian Church (Disciples of Christ) congregations, who wish to pattern their ministry after C.E. Fuller, the father of New Evangelicalism, with one project called the Bethany Project. The Bethany Project is a pilot project in congregational revitalization funded by the Lilly Endowment, for the Christian Church (Disciples of Christ).
The Hudson Institute, a conservative non-profit think tank is also a large recipient of funds from the Lilly endowment.
Over the years, the Endowment has acquired a collection of important Indiana paintings that were in danger of leaving the state. The collection includes paintings by members of the Hoosier Group, John Elwood Bundy and others. The paintings are generally displayed at the Endowment's offices on North Meridian Street in Indianapolis but a recent exhibition was mounted that allowed a number of the paintings to travel to several museums around the state.