19 January 2017

$100 million for Indianapolis charities demonstrates importance of perpetual foundations

by Sean Parnell

The Indianapolis Star reported late last week that the Lilly Endowment was giving $100 million to fifteen local charities engaged in crucial social services work:

The grants, ranging from $5 million to $10 million, are a “game-changer,” said one recipient, helping to support and sustain the work of 10 neighborhood centers, as well as agencies providing hunger relief, counseling and help for the homeless.

Ace Yakey, the endowment’s vice president for community development, said in a statement that the grants offer “transformative opportunities” for the organizations to secure a stronger long-term future.

“Unlike support for day-to-day operations, these funds will help each organization strengthen its financial infrastructure so it can serve more people over the long term and weather unexpected financial challenges,” he said.

The Lilly Endowment has been a longtime fixture in Indianapolis, established in 1937 by members of the family that founded the pharmaceutical company Eli Lilly and Company. The foundation traditionally gives about seventy percent of its grants to charities serving either the Indianapolis area or Indiana.

A big part of the reason the Lilly Endowment is able to put these fifteen charities on sounder financial footing for the long term, of course, is that foundations are allowed to be perpetual, if the founders so chose. Something worth remembering the next time the subject comes up of enacting laws forcing foundations to spend down by a certain date – without perpetuity, this tremendous community asset for Indianapolis and the whole state of Indiana would not be around to make these grants.