Lilly , Eli
By Heather Meek
Graduate Student, Center on Philanthropy at Indiana University
Eli Lilly (1885-1977) was a pre-eminent leader in civic responsibility and philanthropy. Lilly inherited and made his own fortune through the family pharmaceutical company. He was instrumental in turning Eli Lilly and Company into a global giant. He helped in its production of insulin at the Indianapolis plant, and worked to produce a new drug, penicillin, in Indianapolis. A company slogan developed in the 1960s, epitomized Eli Lilly's commitment to the pharmaceutical industry: "For four generations we've been making medicines as if peoples lives depended on it" (Madison 1989, 255). As a founder of Lilly Endowment, one of the world's largest private foundations, he supported educational endeavors, religion, and community service. Much of his philanthropy assisted nonprofit organizations and programs in his hometown of Indianapolis or his home state of Indiana.
Eli Lilly was born in Indianapolis, Indiana, to Josiah K. and Lilly Ridgely Lilly. Eli's grandfather, Colonel Eli Lilly, started Eli Lilly and Company about a decade before Eli's birth in 1876. The Colonel, as he was called, had an enormous impact on the formation of the company and on Eli. He had been an important soldier in Indiana's Civil War efforts. He introduced Eli to Lake Wawasee, a favorite spot throughout Eli's life. Notably, his grandfather began the family tradition of commitment to community and philanthropic work. Likewise, throughout his life, Eli worked continuously to promote and move forward his family's commitment to philanthropy.
Eli's only sibling, Josiah Kirby Lilly Jr., was born in 1893. In 1907, Eli graduated from his father's alma mater, Philadelphia College of Pharmacy, and married Evelyn Fortune. He also willingly accepted his first role at the family company as head of the newly-created economic department. Eli thrived. He revolutionized the company and consistently increased profits by cutting costs and increasing efficiency. In 1909, he was promoted to head of the manufacturing department. In 1914, J.K. Lilly Jr. joined J.K. Lilly Sr. and Eli at the company, thus completing the triumvirate. The three heading the company worked together well.
Throughout the World Wars, Great Depression, governmental intervention and changes, Eli Lilly and Company managed to grow into a strong business. Eli continued to make important contributions to the company and pharmaceutical world. He worked with a Toronto scientist who first developed insulin and Lilly scientist, George Clowes, to mass-produce insulin. Eli Lilly and Company also produced much-needed pharmaceutical products during war time. The company was among the first in the country to produce penicillin. It was committed to research and lived the slogan: "Progress through research." The Company was committed to the highest level of research and efficiency in pharmaceutical production.
In 1932, Eli assumed the role of company president, though his father continued to play an important role in its operations until his death in 1948. During Eli's years as president, profits and employees grew, as did the company's focus on research, effectiveness and efficiency of operations, and satisfied employees. Under his leadership, no employees were laid off during the Great Depression and Lilly managed to keep their pay the same. He was generally approachable and was respected by his employees. Eli also expanded operations beyond Indiana and the United States.
The Lilly Endowment was started in 1937, with donations from Eli, Josiah K. Sr. and Josiah K. Jr. When J.K. Lilly Sr. passed away, he left behind an estate worth $6.5 million. Most of this money went directly to Lilly Endowment. In a time following the Great Depression, when many successful Americans were making large profits, Eli had the vision, compassion and innate desire to do something more. In 1937, he worked to start Lilly Endowment, which would act as an extension of Eli and the Lilly family's continual and generous philanthropic work. The Lilly Endowment was involved in religious activities, though this was previously rare for endowments. The Endowment's focus became education, religion, and community development.
J.K. Lilly Jr. served as executive vice president under Eli. The only male in the succeeding generation to carry on the family tradition of working at the company was J.K. Lilly III. Eli was eager for him to learn the business, but, in 1946, J.K. Lilly III resigned his post with the company, never to return. After J.K. Lilly Sr.'s death in 1948, J.K. Lilly Jr. served as president of the company from 1948-1953 and Eli served in his father's vacated role as head of the Board of Directors. Eli struggled with the idea of the company being led by someone outside of the Lilly family, but Eugene Beesley was named president in 1953.
In his personal life, Lilly suffered the loss of two infant sons; but he and Evelyn welcomed a daughter, Evie, in 1918. Unfortunately, Evelyn and Eli had an unhappy marriage and they divorced in 1926, a controversial practice at the time. Evie lived with her mother in Massachusetts; yet, Eli made an effort to be a part of her life. Evie seemed to have a great deal of respect for her father, although she was possessed by a life-long struggle with alcoholism and failed relationships. In 1927, Eli married Ruth Allison Lilly, who had been his secretary. In Ruth, he found a friend and lifelong partner.
After "retirement" (Eli always placed the words in quotation marks), Eli found larger amounts of time for the causes, study, and work that he found himself drawn to throughout his life. Eli and Ruth traveled, including frequent time spent at Lake Wawasee. He continued to read and write funny rhyming poetry. He served on numerous boards for organizations that he believed were important.
After the death of Eli's wife in 1973, he was never the same. Eli wanted to live to celebrate the centennial of Eli Lilly and Company. He was indeed a guest at the event in 1976. The next year, seventy years after he started working at the family company, Eli Lilly died. He asked that no comments be made at his funeral, remaining modest to the end.
Eli Lilly served as a dynamic leader of Eli Lilly and Company, but the work that he was most proud of was in the world of philanthropy. Lilly believed "giving was the responsibility of those who made money" (Madison 1989, 206). Like many successful businessmen of the day, he gave large sums of money to charitable causes. Yet, Eli Lilly was revolutionary because he actively sought organizations whose mission and work he believed was important. He advised his daughter, Evie, to "give part of her allowance to worthwhile charitable and educational objects. This sounds easy, but the 'catch' is that it takes lots of time and study to know what objects of that nature are worthwhile and what are not" (Ibid., 189). Eli had excellent role models in his father and grandfather. He supported causes similar to those of his mentors, yet, he preferred to keep the funds in his hometown of Indianapolis and home state of Indiana. Eli often sought out organizations that he wanted to learn more about and possibly support financially. Eli Lilly was very often an anonymous donor, requesting no publicity.
The Lilly Endowment, established in 1937, became a method for Eli to further support various causes. While his father and brother also supported the Endowment, Eli was the driving force behind its idea and implementation. Eli wanted to continue the tradition of giving charitably, and he felt Lilly Endowment was a method to give charitably rather than pay higher taxes. For many years, the Endowment consisted of all Lilly stock and a board of directors comprised strictly of Lilly family; in years to come, tax law required diversification in both areas. By the end of the 1960s, during Eli's life, the Endowment was one of the top five foundations in the country. Yet, the Lilly family never publicized this fact. In recent years, Lilly Endowment has continued to place in the top five nationally. The Endowment continued Eli Lilly's commitments by supporting programs in the areas of education, religion and community development (including community service).
Specifically, Eli Lilly felt that the cause he supported closest to his heart was character education. He said, "Our spiritual development has a hundred-year lag behind our material progress" (Madison 1989, 192). Eli's commitment to character education is reflected in Lilly Endowment's grantmaking, such as its support of the character education projects of men like Ernest Ligon and Pitirim Sorokin. Along with character education, Eli and the Endowment were benefactors to higher education. Eli was a great believer in a liberal arts education. He and the Endowment supported mostly private schools, although public school programs received some financial support. Institutions receiving grants were largely in Indiana; Earlham and Wabash College were two of Eli Lilly's favorites.
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. Many endowments and foundations do not venture into this area but, from its beginning, Lilly Endowment has made religion one of its top three areas of focus.
The Lilly Endowment's third focus area is community and community service. In 1954, the Endowment, with encouragement from Eli, funded a study of philanthropy in Indianapolis. The Endowment continues this commitment to philanthropy today. In 1972, Lilly met with then mayor of Indianapolis, Richard Lugar. The two men discussed what Eli and the Endowment could do to strengthen Indianapolis. The first order of business was Lilly support for the resurgence of the City Market in its downtown.
Eli was never personally interested in arts or politics. On the occasion when he stepped into the political arena, it was generally in support of conservative candidates. He supported numerous efforts to increase the arts in Indiana, but this was because of his commitment to doing what was best for the community, rather than a personal interest in the arts. Lilly donated his Chinese art collection, a jeweled watch collection, and Paul Revere silver pieces to the Indianapolis Museum of Art.
Eli Lilly's philanthropic gifts spanned his lifetime and went beyond the work of Lilly Endowment. At the time of his death, Lilly's estate had a worth of $165,775,000 (Madison 1989, 267). Twenty percent of the estate was left to eleven of Ruth Lilly's favored institutions. Eighty percent went to Eli's favorite institutions. Of the $33.8 million given to Ruth's causes were: The Children's Museum of Indianapolis, Save the Children Federation, three Southern schools, Day Nursery Association of Indianapolis, American Committee for Keep, Cooperative for Relief Everywhere, Fellowship in Prayer, Episcopal Diocese of Indianapolis and the Washington Cathedral. Eli's distribution was given to: Indianapolis Museum of Art, Butler University, Earlham College, Wabash College, Philadelphia College of Pharmacy, the Indiana Historical Society, Children's Museum of Indianapolis, Christ Church, Orchard School Foundation, Park-Tudor Foundation, Trinity Episcopal Church, St. Paul's Episcopal Church, and Historic Landmarks Foundation of Indiana (Ibid., 266).
Ties to the Philanthropic Sector
Eli Lilly was a fantastic role model for philanthropy. Lilly did not simply make donations; he made informed donations to organizations that he had researched, and in which he believed and to which he was committed. He was the driving force behind an endowment that is still viable, generous, and in line with Eli Lilly's vision.
One of the factors that set Lilly apart from his contemporaries was a commitment to the study of philanthropy. In the early 1950s, he commissioned a three-year study of philanthropy in Indianapolis. This led to the formation of (and Lilly support for) the United Fund in Indianapolis.
In the 1970s, Lilly realized that, on a personal and on an endowment level, there "were more important projects . . . to back" (Ibid., 219). He researched the causes supported by other major foundations and realized there were important projects that needed assistance in his home state.
Key Related Ideas
Eli Lilly brought a commitment to philanthropy to the Hoosier state. He believed in informed charitable giving and was constantly looking for projects that most usefully assisted the people of his hometown and home state. He served as a role model to Hoosiers, and his Lilly Endowment still remains a standard for philanthropy in Indiana.
Important People Related to the Topic
Colonel Eli Lilly (1838-1898) was Eli Lilly's paternal grandfather. The Colonel was founder of Eli Lilly and Company in 1876. He introduced Eli to Lake Wawasee and piqued his interest in history by explaining his role in the Civil War. The Colonel instilled in Eli the idea of "civic-mindedness" and the importance of Eli Lilly and Company remaining family-led.
Josiah K. Lilly Jr. (1893-1966) was Eli's younger brother. Though they did not get along well as children, the brothers worked together exceedingly well as adults. Eli and J.K. Jr. were in agreement in matters of efficiency and effectiveness within the factory and both were committed to the company and to the community.
Josiah K. Lilly Sr. (1861-1948) was Eli Lilly's father and leader of the company from 1890 until Eli's appointment in 1932. Eli's father was a great mentor, partner, and friend.
Ruth Allison Lilly (1892-1973) was Eli's second wife. Lilly and Ruth married in 1927. She was a friend and partner to Eli. Ruth was also committed to philanthropy and worked on numerous projects that she believed in, particularly, the Children's Museum of Indianapolis.
Related Nonprofit Organizations
The Eli Lilly and Company Foundation was started in 1968 and is completely separate from Lilly Endowment. The Foundation is funded through profits made by Eli Lilly and Company. The Foundation giving plan consistently places Eli Lilly and Company in the list of top ten most generous companies in the world. The Foundation supports education, culture and community, among other things. They also donate Lilly pharmaceutical products and offer an employee donation matching program for eligible nonprofit organizations (Eli Lilly and Company 2003).
Lilly Endowment was founded in 1937 by J.K. Lilly Sr., J.K. Lilly Jr., and Eli Lilly, although the inspiration and driving force was Eli. Over five decades later, the Endowment still funds projects primarily in Indiana and that focus on "religion, education and community development….special emphasis to projects that benefit young people and promote leadership education and financial self-sufficiency in the nonprofit, charitable sector" (Lilly Endowment Annual Report 2001).
Related Web Sites
The Eli Lilly and Company Foundation of the Eli Lilly and Company Web site, at http://www.lilly.com/about/, explains the Foundation through a series of pages. It provides information on the various programs it supports and how funds are distributed.
A Web page in the Eli Lilly and Company Foundation section of the Company Web site explains the difference between the Company Foundation and Lilly Endowment. Since the Endowment does not have a separate Web site, a brief amount of information on the endowment is provided here and additional methods for contacting the Endowment directly are provided at http://www.lilly.com/products/access/foundation/cash/wesupport.htm.
The Lilly Newsroom on the Eli Lilly and Company Web site, at http://www.lilly.com/about/history.html, provides a very brief overview history of the formation of the company.
Bibliography and Internet Sources
Clark, Roscoe Collins. Threescore Years and Ten: A Narrative of the First Seventy Years of Eli Lilly and Company 1876-1946. Privately Printed in Chicago: The Lakeside Press, 1946.
Eli Lilly and Company. Eli Lilly and Company Foundation. [cited 22 January 2003]. Available from http://www.lilly.com/products/access/foundation.html
Kahn, E.J. All in a Century: The First Hundred Years of Eli Lilly and Company. Indianapolis: Lilly, 1976.
Lilly Endowment. Annual Report 2001. Indianapolis: Lilly Endowment, 2001.
Madison, James H. (1989) Eli Lilly: A Life, 1885-1977. Indianapolis: Indiana Historical Society. ISBN: 0871950472.
Wisely, Susan. "The Pursuit of a Virtuous People," Advancing Philanthropy 5 (1997-1998, Winter): 14-20.
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