The Indianapolis-based Lilly Endowment saw its assets shrink 20 percent in 2004, as the price of Eli Lilly and Co. stock sagged, the Indianapolis Star reports.

With 99.9 percent of its assets in Lilly stock, the value of the endowment's assets rise and fall in lockstep with the pharmaceutical giant's share price on the New York Stock Exchange. According to its 2004 annual report, the endowment's assets last year totaled nearly $8.6 billion, down from a peak of $15.8 billion in 1998, while the amount it paid out in grants dropped 7.5 percent, down for the third year in a row. Nevertheless, the endowment, the largest charitable foundation in Indiana, still contributed $285 million to nonprofits in the state.

Endowment spokeswoman Gretchen Wolfram said the foundation's board of directors continues to review whether to maintain the majority of its assets in Lilly stock. But, she added, the stock has outperformed the rest of the market, helping the endowment grow to its present size from $3.1 billion a decade ago. "Over the past ten years, assets have been up and assets have been down," Wolfram noted. "We just sort of go with what's there. And we think that, since 1937, being able to distribute $5.6 billion is a pretty good record."

According to the Chronicle of Philanthropy, the endowment, which last year was the nation's second-largest foundation behind the Bill & Melinda Gates Foundation, has slipped to fourth place, behind Gates, the Ford Foundation, and the Robert Wood Johnson Foundation.

Eugene R. Tempel, executive director of the Center on Philanthropy at Indiana University, said the Lilly Endowment was hardly alone in seeing the value of its holdings decrease in recent years as the stock market fell. "All of the foundation assets fell in this country when the stock market fell — it wasn't just Lilly," said Tempel. "So foundation giving in general began dropping in 2001, 2002, and 2003."