In 1895, Henry Phillips left a portion of his estate to the American Philosophical Society to support research in archaeology and philology, to which supplementary bequests were added in 1903 by his aunt, Emily Phillips, and uncle, Henry M. Phillips. Originally used to acquire books in these subject areas, the increasing strength of the APS collections for Native American languages combined with a critical need for support for primary research led to a gradual change in the use of the Phillips Fund.

Since the 1930s, the APS had provided grants to support research on Native American languages, but in 1941, a Special Committee on the Future Policy of the Library recommended tapping the Phillips Fund for this purpose. Following approval of the Committee on the Library in 1944, the first grant under the Phillips Fund was awarded in the fall, 1945, supporting Zellig Harris of the University of Pennsylvania in his research on the Cherokee language. Since the 1960s, the results of Phillips grants -- including field notes, audio and visual recordings, dissertations, and published and unpublished works -- have been sent to the Library for inclusion in its collections.

The Phillips Fund currently provides grants for research in Native American linguistics and ethnohistory, and the history of studies of Native Americans, in the continental United States and Canada. Grants are not made for projects in archaeology, ethnography, psycholinguistics, or for the preparation of pedagogical materials.