The Lilly Endowment was created in 1937 by J.K. Lilly Sr. and his two sons, J.K. Lilly Jr. and Eli Lilly, who also headed the pharmaceutical company Eli Lilly and Company. Although the endowment and the company are legally separate, the endowment remains a substantial shareholder in the company.
The endowment funds programs supporting American religion, center-right public policy groups, and charities in the Indianapolis area.
The Lilly Endowment was founded in 1937 by J.K. Lilly Sr. and his two sons, J.K. Lilly Jr. and Eli Lilly. J.K. Lilly Sr.’s father, also named Eli Lilly, founded the pharmaceutical firm Eli Lilly and Company in 1876. The second Eli Lilly ran the endowment for 40 years until his death in 1977. During that period, notes a history of the endowment, “the Lilly Endowment was essentially run out of Eli Lilly’s desk drawer…there was no systematic approach to the fund’s charitable contributions.” 
After the second Eli Lilly’s death in 1977, the Lilly Endowment began to diversify. It was an investor in the Hoosier Dome (later the RCA Dome), whose existence enabled the Baltimore Colts of the National Football League to move to Indianapolis in 1984. 
Eli Lilly and Company Stock Holdings
The endowment began to sell Eli Lilly and Company shares beginning in 2006. From September 2019 through January 2020, the endowment sold two million shares of the company for $450 million, but the endowment retained 11 percent of the company’s common stock.  The value of Eli Lilly shares increased by 52 percent between 2021 and 2022, leading the endowment to sell 1.3 million shares for $391.4 million. As of April 2022, 89.5 percent of the Lilly Endowment’s stock was in Eli Lilly common, and the strong performance of the company led Lilly Endowment assets to increase from $17 billion in 2019 to $21 billion in 2020. 
Support for Center-Right Public Policy
The Lilly Endowment has long been a supporter of center-right nonprofits. In a 2011 interview in Reason, George Mason University economist Walter Williams said that when he became chairman of the department in 1995 “there was considerable hostility” to hiring free-market economists, so he launched a successful drive to “raise money to hire people and subsidize hiring people.” Williams credited the Lilly Endowment and the Olin Foundation with giving the university support. 
Center-right organizations receiving more than $100,000 in Lilly Endowment grants in 2021 included the Atlas Network ($500,000), Fraser Institute ($300,000), Sagamore Institute ($250,000), Manhattan Institute ($200,000), Pacific Research Institute ($175,000), Federalist Society ($150,000), American Enterprise Institute ($100,000), and Philanthropy Roundtable ($100,000). 
Support for African-American Organizations
In 2020 the Lilly Endowment donated $100 million to the National Urban League for a multi-year study, in collaboration with the Indianapolis Urban League, about ways the lives of Black residents could be improved. 
In 2022, the Lilly Endowment donated $20 million to the National Trust for Historic Preservation’s African-American Cultural Heritage Action Fund for a program to preserve Black churches. Other contributors to this fund include the Ford, JPB, and Mellon Foundations.