The boom in obesity-fighting drugs is creating a seismic shift among the biggest private foundations in the U.S.
The Lilly Endowment, the largest shareholder of Eli Lilly & Co., has seen assets balloon after the Mounjaro maker’s stock soared almost 60% last year on the back of the weight-loss craze.
Read More: Weight-loss drugs bring in even more money than expected
The charity is now likely sitting on about $60 billion in assets, up from $40.8 billion in 2022, said John Seitz, founder and CEO of the research firm FoundationIQ. That’s helping the Indiana-based family endowment — the nation’s second-largest — close the gap with the Bill & Melinda Gates Foundation, which held $68 billion as of 2022, Seitz said.
“Lilly, if it keeps up like this, is going to be the biggest game in town,” he said. Seitz estimates the surge in Eli Lilly stock allowed the endowment to give about $2 billion in 2023, compared with $1.3 billion the previous year.
Of course, some analysts have questioned whether weight-loss drugmakers’ shares can extend their meteoric rise in 2024. Among the challenges: growing competition, manufacturing issues and stretched valuations.
Read More: Lilly warns against ‘cosmetic’ use of popular weight-loss drugs
“It could all end in a second if Lilly’s share price gets killed,” Seitz said.
For now, though, the Lilly Endowment is emerging as a philanthropic powerhouse that rivals the venerable “Big Three” of the Ford, Carnegie and Rockefeller foundations. It has deliberately kept a lower profile, especially compared to the Gates Foundation, which puts its benefactors front and center and is known globally for supporting health care and poverty-related causes.
The main recent beneficiaries of the Lilly Endowment’s largesse have been Indiana-based organizations, which receive the geographic majority of its funding every year, as well as religious groups. Since 2020, the charity has given more than $1 billion to a range of mainstream Christian causes, from museums to seminaries and pastoral support — including nearly $500 million, or 38% of its total donations, in 2022.
The nonprofit rarely gives interviews and declined to speak with Bloomberg News, instead answering questions via email.
For decades, the endowment has aimed “to deepen and enrich the religious lives of Christians in the United States, principally by supporting efforts that enhance the vitality of congregations and help ensure that all types of congregations have a steady stream of wise, faithful, diverse and well-prepared leaders,” Judith Cebula, the organization’s communications director, wrote in an email.
The foundation operates independently from Eli Lilly, although several former executives and one Lilly family member serve on its board. Some of its community development grants have come under recent scrutiny, including one to a Washington think tank engaged in, among other things, lobbying related to insulin, which the company produces. The endowment has said the “modest” donations, often in the six figures, were unrestricted operating grants not directed to specific issues.
HOMETOWN FOCUS
Its independence from the drugmaker means the endowment still follows the family’s original goals when setting it up in 1937. The foundation concentrates its gifts into community development, education and religion — particularly in its hometown of Indianapolis and the state of Indiana.
“There’s something worthy of respect that it’s willing to follow its principles and its interests even if it’s out of step with its other peer institutions,” said Benjamin Soskis, a nonprofit researcher with the Urban Institute.
Nowhere is its tack more divergent than when compared to that of Ozempic maker Novo Nordisk A/S, which similarly benefited from the weight-loss trend and gave away $1.1 billion through its corporate-linked foundation in 2022. The Novo Nordisk Foundation’s donations are concentrated in health, sustainability and life sciences initiatives, including a new $265 million vaccine development program and a $220 million gift to build Denmark’s first quantum computer.
When it comes to religious giving, the Lilly Endowment takes a wide approach. A $93 million award designed to help parents and caregivers pass on their faith to a new generation went to 77 groups “affiliated with mainline Protestant, evangelical, Catholic, Orthodox Christian and Pentecostal faith communities,” the endowment wrote in its announcement. “Many of the organizations are rooted in the Black church, Hispanic and Asian Christian traditions.”
It also endowed religion-curator positions at Smithsonian Institution museums, funded documentaries, sponsored podcasts and supported a nonprofit religious-news organization, as well as backed a religion-journalism initiative with The Associated Press.
The scale and rigor of the Lilly Foundation’s gift-giving process make it “different from virtually all other private foundations that give to religious causes,” said Michael Lindsay, president of Taylor University, a private Christian liberal arts school in Upland, Indiana, that was recently awarded a $30 million development grant as part of Lilly’s education initiative.
“They have brought a professionalism to the world of religious grant-making that doesn’t exist in most charitable giving for religious causes,” he wrote in an email.
The endowment hasn’t reported its 2023 assets or giving totals but was required to distribute at least $1.4 billion the previous year, according to its most recent Internal Revenue Service filing. It has publicly announced hundreds of millions in 2023 grants, including $80 million to overhaul Indianapolis parks, $95 million for a Compelling Preaching project to help pastors, $115 million to aid church congregations and a $32 million gift to Nashville’s Belmont University for a nationwide Christianity-related arts initiative.
Through its community foundation initiative, it has also set aside $210 million for local Indiana foundations. Grants like these are likely to only get bigger as it works to keep pace with a rising stock price that has shown few signs of slowing down — similar to what Amazon.com Inc.’s top investors have experienced.
“It’s an old philanthropy with a new philanthropy problem,” Soskis said. “Ask MacKenzie Scott how it feels.”