By the summer of 1905, it was clear that Edward MacDowell was seriously ill. In July he signed over power of attorney to his wife Marian. He worried increasingly about the fate of their beloved farm in Peterborough, New Hampshire. For some time he had been thinking about inviting other creative artists to work there, so that they might enjoy the same ideal working conditions that had inspired his own best work. He envisioned a smaller-scale American Academy, like the one in Rome recently founded by his colleague, architect Charles McKim.

Now facing his mortality, MacDowell obsessed over this idea. Marian MacDowell consoled her husband with the promise that she would make it happen. She would turn their home into a creative retreat, where artists could work undisturbed in a community of their peers. She wasted no time turning her intentions into action.

In the fall of 1905 a group of MacDowell's former students and supporters met in New York City to form the MacDowell Club of New York, which would become a vibrant force in the cultural life of the city. At its inaugural meeting on October 29, Marian MacDowell laid out her plan to offer their Peterborough property to the organization. The following year the Mendelssohn Glee Club, which MacDowell had directed from 1896 to 1898, started a fund to help pay for the care of the ailing composer. From May 1906 until the composer's death in January 1908, a specially appointed committee solicited donations from around the country. The Edward MacDowell Fund of the Mendelssohn Glee Club paid Marian a small monthly stipend and covered other expenses, including Edward's funeral costs. When the fund was closed in March 1908, the remaining balance of close to $30,000 was offered to Marian. She refused to accept it for herself, insisting it be used to support the colony.

In 1907, the MacDowell Club of New York and the Mendelssohn Glee Club joined forces to establish the Edward MacDowell Memorial Association for the purpose of taking legal possession of the MacDowells’ Peterborough property and administering the funds to support it. “I was wise enough to realize that there had to be something tangible for people to have [in] back of a venture so that they could believe in what we were trying to do,” Marian said.