Lilly Endowment Passes Ford to No. 1
NEW YORK (AP) _ Swelled by stock market gains, a charitable fund started by drugmaker Eli Lilly and Co. has overtaken the Ford Foundation as the nation’s biggest private foundation.
The Ford Foundation had held the top ranking for more than 30 years. Its assets now total $9.4 billion, compared with $12.7 billion held by the Lilly Endowment, the Chronicle of Philanthropy reported Monday.
The Lilly Endowment’s assets, which depend almost entirely on stock in Eli Lilly, have soared 140 percent in two years, up from $5.3 billion in 1995.
Indianapolis-based Eli Lilly has seen its stock nearly double in the last year, to $67.31 1/4 per share from $38.68 3/4.
Much of Eli Lilly’s growth has been fueled by strong sales of Prozac, the antidepressant that is one of the nation’s top 10 drugs. Prozac had $2.4 billion in sales in 1996, and accounts for nearly a third of the drugmaker’s total sales.
In 1997, the stock market posted gains of more than 20 percent for an unprecedented third straight year.
The ascent of Lilly and other stock-rich funds raised questions, however, about whether such private foundations should rely heavily on the stock market. In 1992, the Lilly Endowment’s assets fell to $2.9 billion from $3.9 billion when Eli Lilly stock took a slide.
``It’s a question that people need to look at _ What is the best way to make sure foundations maximize their assets?″ said Stacy Palmer, managing editor of the Chronicle of Philanthropy. ``They are supposed to be providing money for the public good.″
Lilly Endowment spokeswoman Gretchen Wolfram said the foundation isn’t concerned.
``We’ve certainly had some ups and downs but, in the long haul, this stock has served us well,″ she said. Since the endowment’s founding in 1937, it has given away $1.74 billion, mostly to causes in Indiana.
Based on its new wealth, grants by Lilly will rise from $252 million last year to a planned $413 million this year. Under law, foundations must give away at least 5 percent of their investment assets annually.
In contrast to Lilly, the Ford Foundation, in contrast has pursued a ``diverse portfolio″ to ensure that its assets are strong, said spokeswoman Thea Lurie.
Losing its top ranking would not change the ``scope or depth of the Ford Foundation’s work,″ she said. ``We applaud the growth of other philanthropic institutions.″
The announcement shook the philanthropy world, which has long turned to the Ford Foundation for leadership. ``People will focus on Lilly in a way they haven’t before,″ said Palmer. ``They don’t command national attention, yet now they will.″
Still, she noted that, ``it all depends on how the stock continues to do. They could drop back again, and go quietly away.″
The stock market also boosted other funds’ standings.
The David and Lucile Packard Foundation will rise to third place among foundations in March after it receives a $5 billion bequest of stock in Hewlett-Packard from the estate of co-founder David Packard. The foundation will then have assets worth $9 billion.
The Robert W. Woodruff Foundation in Atlanta, which has 90 percent of its assets in Coca-Cola, rose to seventh place from 10th place this year. The foundation is now worth $3.7 billion.