The Kelley Foundation was founded in 1954 as a result of conversations between Dr. Julius G. Kelley, superintendent of the Barnstable County Hospital in Pocasset, and a successful retired businessman born on the Cape, Edward Bangs Kelley. The latter began his career starting a grocery business in Dennis and went on to become owner of the E.B. Kelley Construction and Equipment Company in New York. He traveled throughout the world, marrying a countess from Budapest, Elza DeHorvath. The Kelleys made Manhattan their home but always kept a house in Dennisport.

Dr. Kelley and E.B. Kelley, as he was known, were distant relatives. Sometime after E.B. and Elza Kelley retired back to the Cape, the hospital superintendent proposed the idea of a foundation "to promote the health and welfare of the inhabitants of Barnstable County."

On December 10, 1954, E.B. and Elza Kelley founded the Edward Bangs Kelley and Elza Kelley Foundation, Inc. Upon E.B.'s death in 1955, the Foundation came to life with the receipt of $25,000 and a few securities from his estate. The first grants were awarded in 1955, generally comprising of medical scholarships, funds for hospital equipment and support for health and welfare organizations. When Elza Kelley died, the balance of the bequest was received and the Foundation's assets were significantly increased.

Today the Foundation has assets of $4.700,000. In the last 20 years, the organization has paid out approximately $3.3 million in grants and scholarships in health, education, social welfare, and culture, all areas with urgent needs on the Cape.