It was during this stay in London that Rumford presented to the Royal Society of London, and to the American Academy of Sciences £1000 Three per Cent. Stock, for the purpose of endowing a medal to be called the Rumford Medal, and to be given each alternate year for the best work done during the preceding two years in the subjects of heat and light. He directed that two medals, one in gold and the other in silver, should be struck from the same die, the value of the two together to amount to £60. Whenever no award was made, the interest was to be added to the principal, and the excess of the income for two years over £60 was to be presented in cash to the recipient of the medal. At present the amount thus presented is sufficient to pay the composition fee for life membership of the Royal Society. The first award of the medal was made in 1802, to Rumford himself. The other recipients have been John Leslie, William Murdock, Étienne-Louis Malus, William Charles Wells, Humphry Davy, David Brewster, Augustin Jean Fresnel, Macedonio Melloni, James David Forbes, Jean Baptiste Biot, Henry Fox Talbot, Michael Faraday, M. Regnault, F. J. D. Arago, George Gabriel Stokes, Neil Arnott, M. Pasteur, M. Jamin, James Clerk Maxwell, Kirchoff, John Tyndall, A. H. L. Fizeau, Balfour Stewart, A. O. des Cloiseaux, A. J. Ångström, J. Norman Lockyer, P. J. C. Janssen, W. Huggins, Captain Abney.

In the summer of 1796 Rumford and his daughter left England to return to Munich. On account of the war, they were obliged to go by sea to Hamburg; whence they drove to Munich, where the count was anxiously expected, political troubles having compelled the elector to leave the city. After the battle of Friedburg, the Austrians retired to Munich, and, finding the gates of the city closed, they fortified themselves on an eminence overlooking the city, and, through some misunderstanding with the local authorities, the Austrian general threatened to attack the city if any Frenchman should be allowed to enter. Rumford took supreme command of the Bavarian forces, and so gained the respect of the rival generals that neither the French nor the Austrians made any attempt to enter the city. The large number of soldiers now in Munich gave Rumford a good opportunity to exercise his skill in cooking on a large scale, and this he did, adding to the comfort of the soldiers and reducing the cost of the commissariat. On the return of the elector, Miss Sarah was made a countess, and one-half of her father's pension was secured to her, thus providing her with an income of about £200 per annum for life. Many of the details of the home life and social intercourse during this period of residence at Munich are preserved in the autobiography of the countess, as well as accounts of excursions, including a trip by river to Salzburg for the purpose of inspecting the salt-mines. After two years' stay in Munich, the count was appointed Minister Plenipotentiary from Bavaria to the Court of Great Britain. After an unpleasant and perilous journey, he reached London, viâ Hamburg, in September, 1798, but was terribly disappointed on learning that a British subject could not be accepted as an envoy from a Foreign Power. As he did not then wish to return to Bavaria, he purchased a house in Brompton Row. But he had been too much accustomed to great enterprises to be content with a quiet life, and was bound to have some important scheme on hand. Pressing invitations were sent him to return to America, but he preferred residence in London, and devoted himself to the foundation of the Royal Institution, though the countess returned to the States in August, 1799. A letter from Colonel Baldwin to her father shortly after her return contains the following passage:—

In the cask of fruit which your daughter and Mr. Rolfe have sent you, there is half a dozen apples of the growth of my farm, wrapped up in papers, with the name of Baldwin's apples written upon them.... It is (I believe) a spontaneous production of this country; that is, it was not originally engrafted fruit.

The history of the remaining period of Rumford's residence in London is the early history of the Royal Institution.

For many years Rumford had had at his disposal for his philanthropic projects all the resources of the electorate of Bavaria, and he had done everything on a royal scale. His original plan for the Royal Institution appears to embody to a very great extent the work of the Science and Art Department, the City and Guilds Institute for the Advancement of Technical Education, the National School of Cookery, the London Society for the Extension of University Teaching, and, in addition to all this, to have comprehended a sort of perpetual International Health Exhibition, where every device for domestic purposes, and especially for the improvement of the condition of the poor, could be inspected. How all this was to be carried out with the resources which the count expected to be able to devote to the purpose, does not appear. Foremost among the objects of the institution was placed the management of fire; for its promoter was convinced that more than half the fuel consumed in the country might be saved by proper arrangements.

The philanthropic objects with which the institution was started are apparent from the fact that it was the Society for Bettering the Condition of the Poor which appointed a committee to confer with Rumford, to report on the scheme, and to raise the funds necessary for starting the project; and one of Rumford's hopes in connection with it was "to make benevolence fashionable." It was arranged that donors of fifty guineas each should be perpetual proprietors of the institution; and that subscribers should be admitted at a subscription of two guineas per annum, or ten guineas for life. The price of a proprietor's share was raised to sixty guineas from May 1, 1800, and afterwards increased by ten guineas per annum up to one hundred guineas. In a very short time there were fifty-eight fifty-guinea subscribers, and to them Rumford addressed a pamphlet, setting forth his scheme in detail. The following are specified as some of the contents of the future institution:—"Cottage fireplaces and kitchen utensils for cottagers; a farm-house kitchen with its furnishings; a complete kitchen, with its utensils, for the house of a gentleman of fortune; a laundry, including boilers, washing, ironing, and drying rooms, for a gentleman's house, or for a public hospital; the most improved German, Swedish, and Russian stoves for heating rooms and passages." As far as possible all these things were to be seen at work. There were also to be ornamental open stoves with fires in them; working models of steam-engines, of brewers' boilers, of distillers' coppers and condensers, of large boilers for hospital kitchens, and of ships' coppers with the requisite utensils; models of ventilating apparatus, spinning-wheels and looms "adapted to the circumstances of the poor;" models of agricultural machinery and bridges, and "of all such other machines and useful instruments as the managers of the institution shall deem worthy of public notice." All articles were to be provided with proper descriptions, with the name and address of the maker, and the price.

A lecture-room and laboratory were to be fitted up with all necessary philosophical apparatus, and the most eminent expounders of science were to be engaged for the purpose of "teaching the application of science to the useful purposes of life."

The lectures were to include warming and ventilation, the preservation of food, agricultural chemistry, the chemistry of digestion, of tanning, of bleaching and dyeing, "and, in general, of all the mechanical arts as they apply to the various branches of manufacture." The institution was to be governed by nine managers, of whom three were to be elected each year by the proprietors; and there was also to be a committee of visitors, the members of which should not be the managers. The king became patron of the institution, and the first set of officers was nominated by him. The Earl of Winchelsea and Nottingham was President; the Earls of Morton and of Egremont and Sir Joseph Banks, Vice-Presidents; the Earls of Bessborough, of Egremont, and of Morton, and Count Rumford, were among the Managers; the Duke of Bridgewater, Viscount Palmerston, and Earl Spencer the Visitors; and Dr. Thomas Garnett was appointed first Professor of Physics and Chemistry. The royal charter of the institution was sealed on January 13, 1800. The superintendence of the journals of the institution was entrusted to Rumford's care. For some time the count resided in the house in Albemarle Street, which had been purchased by the institution, and while there he superintended the workmen and servants.