As desired by its founders, Lilly Endowment concentrates its philanthropic efforts in community development in its home territory of Indianapolis and Indiana.

For the past few years, the Endowment has focused especially on how its grants promote a "virtuous circle" of community development.  A virtuous circle has been defined as "a condition in which a favorable circumstance or result gives rise to another that subsequently supports the first."  (The American Heritage Dictionary of the English Language, Fourth Edition) 

The dynamics in the business sector have significant effects on whether there is a virtuous circle of community.  Whether through making cars, developing and selling pharmaceuticals, managing a huge chain store or a small boutique, making art, developing new medical devices or information technology applications, or building engines - the success of such enterprises is absolutely critical for a lively and growing community.

Successful businesses give rise to a healthy nonprofit sector.  Caring and concerned citizens are the volunteers and board members of the community's arts and human service organizations, local school corporations, and colleges and universities.  They are the parishioners of the community's congregations.  Their ability to donate funds and share expertise depends on the prosperity of their employers.  Without profitable, vibrant businesses, the community's nonprofit sector would be seriously undermined, and a virtuous circle could be diminished.

In community development, the Endowment finds appealing programs and initiatives that build or enhance the quality of life in Indiana so that vibrant businesses and their employees will want to remain or locate here.  In Indianapolis the Endowment, for example, believes that its grants to the United Way of Central Indiana, Indianapolis Neighborhood Housing Partnership, and a range of arts and cultural organizations help these organizations foster a more humane and attractive community.  Its grants for charitable and educational initiatives of the Central Indiana Corporate Partnership and the CICP Foundation also help create the conditions and intellectual capital that are essential for a prosperous economy and help make the community a place that businesses want to call home.

Around the state of Indiana, the Endowment continues its interest in and support of efforts to build the quality of life and civic vitality of Indiana communities.  It does this in two principal ways.  The first is through its support of Indiana's impressive array of community foundations.  Through its Giving Indiana Funds for Tomorrow (GIFT) initiative, which began in 1990, the Endowment has supported the development and flourishing of community foundations in every one of Indiana's 92 counties.  The second is through its support of the Indiana Association of United Ways and its programs to help more than 60 United Ways throughout the state.  In the phrase popularized by Harvard University's Robert Putnam, it is "social capital" that the community foundations and United Ways are building and sustaining, the capital that is a vital ingredient of a healthy community.

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