About a year ago, we reported on a game-changing palette of grants from the Lilly Endowment to Indiana arts organizations totaling $100 million. Last month, it was deja vu all over again as Lilly rolled out another $100 million, this time to 15 human service organizations across central Indiana. These grants, too, were quickly labeled “game-changing” by recipients, a full list of whom can be found here.
As we noted in late 2015, these Lilly grants change the game not only through their size (this year’s awards ranged from $5 million to $10 million apiece), but because of their purpose: long-term operational sustainability. Recipients are local nonprofits with limited budgets, and in almost every case they’ll use the Lilly money to establish or fund endowments, rather than spending it immediately on programming.
With a monumental $11.78 billion in assets as of 2015, the Lilly Endowment has the grantmaking power to go broad, and in some areas it does. It’s known nationwide for its higher education giving, as well as programs to support business and early childhood education. Lilly is also a consistent religious funder, supporting Christian-aligned educational initiatives including some interesting projects in journalism.
But Lilly’s core grantmaking, especially in human services (and the arts, as we’ve seen), is local to Indiana. And when a funder has Lilly’s clout, going deep can make a difference for a home region not recently known for its economic vibrancy. In addition to direct grants, Lilly’s community funding strategy leans heavily on the United Way of Central Indiana. Thirteen of the 15 recipients are United Way affiliates.
Community Development VP Wallace “Ace” Yakey heads Lilly’s community grantmaking program, bringing his experience as president of the Indianapolis Economic Development Corp (IEDC) to the other side of the funder-grantee relationship. He sees ensuring financial futures as a role appropriate for a funding titan like Lilly. At the same time, Yakey doesn't envision Lilly's gifts as a substitute for fundraising. He has said, "These grants do not alleviate the need for the organizations to attract ongoing support for their efforts. Indeed, we hope the grants will help them more effectively attract support for their important work."
Grantmaking for financial sustainability is a conservative strategy. While the endowment’s major gifts to schools like Purdue and Duke can be flashier, they are more vulnerable to economic downturns and scarce donors.
By going deep to sustain a network of local “anchor institutions,” Lilly is betting that social capital can cross-pollinate with a thriving local business sector. The funder hopes its community development giving can “build or enhance the quality of life in Indiana so that vibrant businesses and their employees will want to remain or locate here.” This speaks to Lilly’s commitments—and to a strategy big funders can use to make sure nonprofits are stable and thrive over the long term.