Lilly Heiress Expects to Bestow $500-Million on Numerous Charities Through Estate Plan

Ruth Lilly, an heiress to the Eli Lilly pharmaceutical fortune, has created estate plans that provide an estimated half-billion dollars for Indiana nonprofit groups and several arts organizations.

In addition to the $100-million gift to the Modern Poetry Association announced last month (The Chronicle, November 28,) Ms. Lilly’s estate plans, approved in November by an Indiana probate court, detail gifts of roughly $100-million to the Lilly Endowment and to Americans for the Arts, a group in Washington that promotes the arts and arts education nationwide. In addition, Ms. Lilly provided $200-million to create the Ruth Lilly Philanthropic Foundation to support nonprofit programs in Indiana.

Ms. Lilly, 87, is the last surviving great-grandchild of Eli Lilly, the pharmaceutical magnate. Over the past 30 years, Ms. Lilly has given more than $25-million to higher-education institutions, libraries, health programs, and other nonprofit groups throughout Indiana. Since 1997, she has given $5-million to support libraries and deanships at the University of Indiana, and $2-million for electronic library collections at the Honor Society of Nursing, in Indiana. Her estate will provide $200-million to create a foundation designed to continue her “tradition of giving within the state of Indiana,” according to documents filed with the court. The Ruth Lilly Philanthropic Foundation will make grants for educational, religious, literary, or scientific purposes throughout the state.

In addition, the estate plans, which were first reported by The Indianapolis Star, authorize the foundation to donate up to $20-million to any one or combination of the following groups in Indianapolis: the American Red Cross of Greater Indianapolis, the Indiana University Center on Philanthropy, the Herron School of Art, and the Ruth Lilly Health Education Center.

Fluctuation in Value

A great deal of speculation surrounds the actual value of Ms. Lilly’s gifts to Americans for the Arts, the Lilly Endowment, and the Modern Poetry Association. The confusion arises from the complexity of Ms. Lilly’s estate plans, according to Richard Campbell, a lawyer for the Modern Poetry Association. Mr. Campbell explained that the charities will receive funds from a combination of five charitable trusts, as well as a bequest. Since Ms. Lilly’s estate consists mainly of Eli Lilly and Company stock, fluctuations in stock value further complicate the equation, according to Mr. Campbell.

Ms. Lilly’s $100-million gifts to Americans for the Arts and the Modern Poetry Association will radically change the groups’ ability to carry out their missions. Both groups now have less than $1-million in their endowments.

But some critics have questioned whether the funds to these arts groups could have been better used elsewhere. The problem, according to Robert Lynch, president of Americans for the Arts, lies in the image of arts as an area of philanthropy. “There’s just a tiny fraction of overall philanthropy that goes to the arts,” Mr. Lynch said. “The arts use it very cautiously and there’s a great benefit per dollar, but the image needs a lot of improvement. That’s what we work on and there’s a lot more to be done.”

Mr. Lynch added: “The important thing is to make sure that we shepherd this gift for a long-term effort to advance the arts in America for years to come.”