Billionaire Ruth E. Lilly has a small frame, small hands, and a small, whispery voice when she talks. But she talks to almost no one. On the rare occasions when Lilly, 88, and the lone heiress to the Eli Lilly pharmaceutical fortune, leaves her home in Indianapolis' plush North Side, friends say it's often for a drive around town with her nurses. She likes to pass by the dozens of projects she supports. Before she was confined to a wheelchair, she once stopped in at the Ruth Lilly Health Education Center. Receptionist Louise David recalls that the organization's president "was so flustered" to see Lilly there. Flustered, but lucky. Most of Lilly's beneficiaries have never laid eyes on her.
In November, 2002, Lilly established herself as the first lady of verse -- and thrust herself unintentionally into the media spotlight -- when she pledged Eli Lilly & Co. (LLY) stock, estimated then to be worth $100 million, to Poetry, a small Chicago-based magazine that previously had an endowment of only $200,000 and through which she has given an annual poetry prize since 1986.
She followed that with a second gift, valued then at $120 million, to Washington (D.C.)-based advocacy group Americans for the Arts, and a $150 million gift to her family's legacy, the Lilly Endowment Inc., which owns 13% of Eli Lilly, according to Bloomberg Financial Markets. This came on top of the $175 million that Lilly's lawyer, Thomas Ewbank, says she has given to Indiana social and cultural institutions over the past two decades. And when she dies, Lilly will leave hundreds of millions of dollars to the Ruth Lilly Philanthropic Foundation.
SHE'S KEEPING A LIST
Lilly's giving places her in the philanthropic big leagues among supergivers Ted Turner and Eli and Edythe Broad. Like them, Lilly decided to disburse a considerable amount of her fortune while still living. As usual, Lilly declined requests for an interview. But after talking to relatives and associates, it's clear that her giving harkens back to a previous era. She is committed to the arts at a time when philanthropists prefer to focus on medical and social work. She prefers to give directly. And unlike many of her peers who have in place a rigorous application process, Lilly has a far less formal method: She keeps a list of grant requests in the order that they're received. As for her bigger donations, Lilly offers no explanations for her choices. "She keeps her cards close to her vest," says Ewbank, who helps vet the list.
Her latest big gifts required the two small organizations -- Poetry had a staff of four at the time -- to become financially savvy quickly. (This week, Poetry named a new President, John Barr, who in addition to publishing six books of longform poems, is one of Wall Street's most reputable utility bankers.) Like most large pledges, Lilly's were made in stock, so their value fluctuated with the market. Recently Poetry and Americans for the Arts filed lawsuits accusing the bank that manages Lilly's fortune, National City Corp. (NCC), of waiting too long to sell their stock: In the seven months after the gift was made, the price dropped to $47, from $75. In a statement, National City denies the allegations, and says it handled Lilly's trust with "the greatest of care." But following the suit, the bank diversified Lilly's billion-dollar fortune, which was almost entirely in company stock. Critics say the bank is too small and inexperienced to handle such a fortune, though it also took time for the arts groups to understand the structure of the gift. Other organizations that are used to large noncash gifts would have been less surprised by the change in value, says Eugene R. Tempel, executive director of the Center on Philanthropy at Indiana University.
Ewbank says Lilly isn't much bothered by the lawsuit. "She figures, well, she wanted to help these two small organizations, and she did," he says. And while she did consider the impact of such substantial gifts on small groups, Ewbank says she thought they would "survive the growing pains."
Lilly's life has been shaped by a pampered but isolated childhood, a struggle with depression that kept her hospitalized for much of her adulthood, and a late, dramatic recovery, thanks to a drug her family's company pioneered: Prozac. This hardship left her with "a deep skepticism," says Gene E. Sease, a former president of the University of Indianapolis, who has been a friend since they both ordered second helpings of a rich chocolate pecan dessert 30 years ago.
Lilly's great-great-grandfather, Colonel Eli Lilly, founded the drug company in 1876. Her father, Josiah Kirby Lilly Jr., eventually became president and chairman of the board and raised Ruth and her younger brother, Josiah Kirby Lilly III, in Indianapolis. In 1941, Lilly married Guernsey Van Riper Jr., the author. But her depression worsened, and she spent much of her marriage in the hospital. They were divorced in 1981. Soon after, Lilly's brother requested the court to appoint a conservator for her estate. Ewbank says Lilly has always made her own decisions, though.
Strengthened by new medications, Lilly left the hospital in 1986 with "a desire to make up for lost time," says Ewbank. Well into her 70s, never having been on a plane, she chartered a jet to Charleston, S.C., inviting along relatives and staff. She has traveled regularly ever since.
TRADITION OF GIVING
Lilly has brought the same gusto to her philanthropy, each year donating roughly $10 million, more than half of her income. Each spring, she sits down with Ewbank, a bank representative, nephews Ted and George Lilly, and the list of hundreds of grant requests. They start at the top and go down as far as allotted resources allow.
When she dies, Ted and George, along with their four siblings, will continue Lilly's giving through her foundation. Future gifts will support education in the arts as well as science and medical care. "One of us may eventually rise to the top as the philanthropist of our generation, but we're all philanthropically minded," says Ted, the only heir to sit on the board of the endowment.
As spring approaches, Lilly will soon pick up the list that grows longer each year. Ewbank estimates it would take eight years to grant current requests if no more were added. Anderson University, near Indianapolis, recently received funding for a campus wellness center; Franklin College, a leadership center. Perhaps next time she's feeling up to it, she'll go for a drive to check them out. By Jessi Hempel in New York