John Templeton: God's sugar daddy
By LEAH MCLAREN
Added: Fri, 21 Mar 2008 00:00:00 UTC
What is billionaire Sir John Templeton up to? His fans say the venerable investment guru is using his fortune to elevate humanity. His critics see a social-conservative plot
Globe and Mail
When Sir John Templeton was a boy growing up in Winchester, a hardscrabble Tennessee town just west of Chattanooga, he and his brother Harvey built a radio receiver with parts they had scavenged.
"Farmers from all over the county would come by to see the boys pull voices from the air," says his niece.
Sir John is 95 now, so radio wasn't much older than he was at the time. But even then he fit the Methodist bill as set down by John Wesley, although his family was rock-solid Presbyterian. "His earliest virtues," Lauren Templeton explains, "were thrift, an industrious nature, wild curiosity and a quiet self-assuredness."
So industrious and self-assured, in fact, that he refused to give up when, in his graduating year and with his heart set on Yale, he discovered that his high school didn't offer a math course he needed. He not only organized the class, he taught it — so well that everyone, himself included, passed.
So he got into Yale, won a Rhodes scholarship and eventually acquired legend status as a billionaire investment guru who was knighted by the Queen and whose name is almost synonymous with the mutual funds Canadians list on their tax returns at this time of year.
Now, having made and saved more money than most people can imagine, he lives in seclusion in the Bahamas, communicating with the outside world mostly by fax machine and increasingly famous for following the last of John Wesley's money-management strategies: He is giving away his wealth in such style — $60-million a year — that Time magazine still considers him one of the world's most influential people.
Last week, Poland's Michael Heller learned he will receive this year's $1.6-million Templeton Prize, the richest philanthropic award bestowed upon an individual. A cosmologist, philosopher and Roman Catholic priest, Mr. Heller explores the origins of the universe — very much in keeping with his deeply religious benefactor's mission: to unite science and the spiritual.
"This is someone who's really thinking big on a colossal scale," says philosopher Charles Taylor, the Canadian who won last year's prize.
"It's a Napoleonic vision, certainly, but you must think big if you want to get even the smallest thing done in this world."
Alas, not everyone is so keen. One detractor describes the net result as "bad science," while others fear the true goal is to help social conservatives bring scripture back to the classroom and entice secular scientists seeking scarce research dollars to "see the light."
Clearly, there is a need to know more about this Napoleon and just what he is up to.
John Marks Templeton was born on Nov. 29, 1912. His parents, Harvey and Vella, were among Winchester's few educated, middle-class residents. A lawyer, his father also was a keen entrepreneur who ran a cotton gin, sold insurance, bought real estate and became a landlord. He wasn't a particularly talented investor (his family's fortunes rose and fell with the times), but his most successful ventures made a deep impression on his eldest son.
The law office overlooked Winchester's main square, so Harvey could see the courthouse where auctions were held when the bank foreclosed on farms. "When the auctions failed to produce a highest bidder," writes Lauren Templeton in Investing the Templeton Way, the book she and her husband, Scott Phillips have just published, "Harvey Sr. would leave his office and bid usually able to buy farms for a few cents on the dollar.
"Uncle John's observation of this practice as a young boy is likely the very first seed of this most famous investing approach, which he coined, buying at the point of 'maximum pessimism.' "
Of course, "buy low, sell high" is an old stock-market maxim, but it takes courage to follow through. And as Mr. Templeton has wryly put it, "usually God favours the people who try to do good. So, when you find the crowd is desperately trying to sell, help them and buy. When you find that the crowd is desperately trying to buy, help them and sell. It usually works out."
This kind of gutsiness got him his start as an investor. In 1939, he was young and living in a seedy Manhattan walk-up when he took an almost unthinkable risk. He borrowed $10,000 and bought $100 worth of every stock then valued at less than $1 a share on the New York Stock Exchange. It looked like madness, but Germany had just invaded Poland and he felt the looming war would drive up the market. All but four of 104 stocks he bought turned a profit.
His ability to calculate risk and sense a payoff proved uncanny and consistent. (The subtitle of his niece's book refers to him as the "legendary bargain hunter.") Sixty years later, the same man who bought low as conflict loomed sold high just as the tech bubble was about to burst.
The approach may seem strangely opportunistic for someone described as "eternally loving" and "boundlessly generous." But as his niece explains, "His investment philosophy is actually a very optimistic way to look at things. Basically, he's saying, 'When everyone else is flipping out, don't follow suit.' "
He'd also learned not to take money for granted. During the Depression, while he was in a college sophomore, his father told him that, because of the state of the economy, he couldn't contribute another dollar to his education.
"At first, this seemed like a tragedy," Sir John has been quoted as saying. "But looking back, it was the best thing that could have happened."
It also may have been the seed of his mythic frugality. Despite his vast wealth, he flies economy class and long ago renounced his citizenship and took up residence in the Bahamas, a tax haven with a wonderful climate. (A naturalized British citizen since the 1960s, he was knighted for his charity work in 1987.)
Nephew Handly Templeton remembers going on a European vacation with his uncle, aunt and eight young cousins. "He drove us across the continent in a Volkswagen bus. At the beginning he said, 'Here's the money we have and anything left at the end, we can split the rest.'
"We ate bread and cheese and stayed in hostels. We saw a lot, but it also taught us a valuable lesson about money."
Lauren Templeton says "the accumulation of money was merely a way for him to measure his progress. He wasn't out buying Rolexes, that's for sure. This is a man who made $200-million off Kia automobile stocks, but for many years thought a Kia was too expensive to buy. Bargain-hunting affected every part of his life."
Stephen Post, director of the $8-million, Templeton-funded Institute for Research on Unlimited Love in Cleveland, feels the fortune is of interest only for the noble purpose it can further. "He's like John D. Rockefeller, who said, 'God gave me my money.' "
And, of course, spirituality, if not God alone, is a big concern now that he is spending it.
Canadian researcher Elizabeth Dunn reported this week that people who spend their money on others feel happier than those who spend it on themselves. According to old friend and finance colleague Foster Friess, this applies to Sir John. "I don't think he went out of his way to accumulate. It's just something that happens to people who are committed to serving others. It's not something he sought, but something that came to him because of his serving attitude.
"His faith dictated that the money wasn't really his anyway but that he was merely a steward of it. So that is probably why he was motivated to spend it in a way he thought would be pleasing to God."
NO BILL GATES
Unlike many high-profile philanthropists trying to cure the world's ills — such as the attempt by Bill and Melinda Gates to use their Microsoft millions to eradicate malaria — Sir John prefers a more oblique approach: Help people through the power of positive thought and love. It's a philosophy grounded in the New Thought Movement — a loose affiliation of U.S. denominations known as the Unity Church that believes people can conquer adversity and sickness through prayer and positive thinking.
Now deeply embedded in the American psyche, New Thought's influence can be seen everywhere from the Christian Science church to Oprah Winfrey. But Sir John's interest in it sprang from his mother. A university-educated free spirit who financed a Christian missionary in China, Vella Handly Templeton provided the childhood subscription to Modern Thought, the magazine created by religious mystic and church founder Charles Fillmore, that fostered her son's lifelong fascination with the power of the divine.
"In general, the problem with our culture is narcissism, solipsism and selfishness," says Steven Post, who is also a professor of bioethics at Case Western Reserve University. "Sir John has always said to me, 'Just love and let everything else take care of itself.' He agrees with Abe Lincoln, who said we have to focus not on what we know, but on what we don't know.
"It's a very different approach to that of Bill Gates, but in 100 years, they're going to look back and say, 'Bill Gates did some great things, but Sir John was a visionary.' We can cure all the malaria we want, but if we're living brutal, nasty, empty lives, it will only do so much good."
Based just outside Philadelphia in Conshohocken, Pa., the charitable foundation created to generate all this positive thinking is run by the great benefactor's son, Jack, a former pediatric surgeon and born-again Christian who seasons even banal conversation with religious references.
Amid an intellectual climate in which secularists such as Christopher Hitchens and Richard Dawkins are waging war on evangelical Christians and Muslim extremists alike, the foundation hands out its $60-million each year for the study of everything from intelligent design (the latest take on Biblical creationism) to evolutionary psychology and the social and psychological effects of forgiveness, altruism and happiness.
Despite its Christian roots, the Templeton Prize for "progress toward research or discoveries about spiritual realities" has gone to thinkers of many religious and ideological stripes, from Mother Teresa (the first recipient in 1973) and evangelist Billy Graham (1982) to Russian dissident Alexander Solzhenitsyn (1983) and Charles W. (Chuck) Colson (1993), the Watergate conspirator who did jail time and now runs the world's largest prison-outreach program .
"I grew up as a Presbyterian," Sir John explained during a rare interview in 2005. "Presbyterians thought the Methodists were wrong. Catholics thought all Protestants were wrong. The Jews thought the Christians were wrong.
"So, what I'm financing is humility. I want people to realize that you shouldn't think you know it all."
Winner Charles Taylor, for example, says he is expected simply to keep doing what he does best. "My work for the Templeton prize is just about everything I've ever done, thought and written," explains the emeritus professor of political science and philosophy at McGill University.
He and the mysterious money man have yet to meet, but Prof. Taylor — currently working with historian Gérard Bouchard on a year-long study of Quebec's relationship with its religious and cultural minorities — says that "Sir John has a very wide, broad view of what spirituality can be.
"Unlike Bill Gates, who likely woke up with money one day and thought to himself, 'Now what do I do with this?' you can see Sir John wanted to make all this money because he had an interest in the realm of ideas from very early on. It's a very different psychological type from the average tycoon."
Different but effective. The Templeton influence on the cash-starved world of ideas is profound and growing. In addition to the big prize and millions more a year in smaller personal grants, his foundation finances big-ticket agencies such as Prof. Post's Institute for Research on Unlimited Love (dedicated to "altruism, compassion and service") and the Positive Psychology Center at the University of Pennsylvania (promoting "scientific study of the strengths and virtues that enable individuals and communities to thrive").
Led by bestselling author and self-help guru Martin Seligman, a past president of the American Psychological Association, the centre has been able to move "positive psychology" from the New Age periphery to the academic mainstream. It's now one of the more popular undergrad courses at Harvard.
As well, the Association of American Medical Colleges credits the Templeton influence with paving the way for a course on spirituality and medicine that is now part of the standard curriculum at most U.S. medical schools.
And yet James Coyne, a respected psychologist also on staff at the University of Pennsylvania, would rather the lines between faith and science not be blurred.
He has conducted research that refutes the findings of Templeton-financed studies that claim forgiveness and "infinite love" have a healing effect on the sick. Prof. Coyne has found instead that such enforced positivism can actually have an adverse impact on the ill, which flies in the face of a central Templeton belief: that an individual's ability to think his or her way out of adversity builds character and is good for the soul.
"To me, it just makes for bad science," Prof. Coyne explains over the phone from Philadelphia. "As an agnostic, I acknowledge there's a lot I don't know. But at the same time, you have to wonder: If there is a God out there, would she really want to reveal her existence by proving in a randomized trial that some people do better than others through the power of prayer?"
Closeted away on his tropic isle, John Templeton seems undeterred by critics or academic in-fighting. He no longer gives interviews, letting his money do the talking.
In 2005, he sold off one of his larger personal funds and pumped another half-billion dollars into the foundation, rekindling fears that he's a secret social conservative and prompting Business Week to describe his efforts as "the most quixotic mission being taken on by any major American philanthropist."
Prof. Coyne accuses the foundation of being more results-oriented than open-ended. "They've essentially bought off the field of psychology," he says. "They wine and dine editors of journals and get better treatment in being published, and they structure grants in a way that's very tempting, if not outright corrupting, to young academics.
"If it were a drug company giving away the money, there would be public outrage."
Such charges irritate Charles Taylor. "It's utterly insulting to think that anyone who got this prize in natural science was bought over," he fires back. "A scientific culture is very badly conceived if it wants to set aside spiritual concerns."
It's true that Mr. Templeton's philanthropic vision appears to be a mass of contradictions. A devout Christian, he started each morning of his working life with a group prayer, but he also has long sought understanding through cross-cultural religious study — witness a book he wrote entitled Agape Love: A Tradition Found in Eight World Religions.
Yet, despite all this spirituality, he remains very much the hard-nosed financier, grounded in the real world and determined, some say, to find a scientific explanation for the existence of God. As he explained to Business Week, in trying to overcome the conflict between science and spirit, "what I'm trying to say is, 'Don't argue — maybe you're both right.' "
He lives in a modest Bahamas house he has owned for years. According to a foundation spokesman, he is frail, having outlived two wives and one of his three children (his daughter died during a routine medical procedure), but still has his wits about him.
"I saw him a year ago in Nassau," recalls Prof. Post. "I had breakfast with him and he was every bit as inspiring as ever.
"I can say without exaggeration, he is the kindest, humblest, most decent man I've ever met. I've never heard him say a bad word about anyone, which doesn't mean he agrees with everyone. He is a supremely loving human being, and at the same time, he's just a boy from Tennessee."
Struggle as a blessing
But this Tennessee boy can be pretty perceptive.
Jack Templeton Jr. says that, when he was a college junior, his father sat him down and said that he'd given the boy's future a lot of thought and come to a difficult decision: He had decided that, unlike his own father, he would keeping paying for his education.
Given his success, the decision might not seem all that tough, but "my father strongly recommends a certain amount of adversity for character development. He felt that people should shape what happens in their lives, and was very opposed to the concept of being passive. He believed that struggle was a blessing you could learn from."
Years later, Dr. Templeton repaid the favour by giving up his medical practice to help safeguard his father's legacy — a legacy summed up in the Book of Matthew's parable of the hidden treasure.
A wealthy landowner gives three sums of money to three of his workers for safekeeping. The first doubles his money, as does the second. And the third, who'd received the smallest amount, takes no chances and buries his in the ground. But when the landowner returns, he is displeased and takes the money away.
"People are surprised by this story," Dr. Templeton explains, "but it's not about punishing the poor. It's about the importance of being a steward and prospering by increasing what you have."
Is it possible to prosper too much? The heir to the Templeton legacy thinks not.
"The more you have," he says, "the more you can give away."
Leah McLaren is a freelance writer and columnist for The Globe and Mail's Style section
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