The Templeton Prize continues to honor Sir John Templeton’s legacy by recognizing the role of religion in progress. In the Philanthropy interview below, Sir John explains his intent in founding the prize. To read more about this year’s recipient click here.
“The more we give away,” Sir John Templeton once wrote in The New York Times, “the more we have left.” By that formulation—indeed, no matter how you calculate it—Sir John has a lot left. In 1992 he sold the Templeton Funds, worth roughly $80 billion, to the Franklin Group in a deal that netted him more than $900 million. At age 86 he is working 60-hour weeks from the same three-story office building he built in the Bahamas when he was running the Templeton Funds. But his work has taken on a different aim—Templeton has created three foundations and is now giving away ten dollars for every dollar he spends on himself.
Born in Tennessee in 1912, Templeton worked his way through Yale during the Great Depression before taking a job on Wall Street. Before long, he had opened his own firm, and in 1954, he started Templeton Growth Fund. He went on to found such successful investment funds as Templeton World Fund, pioneering, in the process, the field of individual investing in emerging markets.
Knighted Sir John in 1987 by Queen Elizabeth II, Templeton is a British subject and not one to take tax planning lightly. While best known for the John Templeton Foundation in Radnor, Pennsylvania (assets $235 million), his two offshore trusts bring the total dedicated to philanthropy to about $800 million. Philanthropy spoke with him at his office in Lyford Cay, the Bahamas.
PHILANTHROPY: How did John Marks Templeton become a philanthropist?
MR. TEMPLETON: I’ve been impressed by the commonsense observation that it is more important to give than to receive. You watch people, and people who focus on trying to get usually wind up unhappy. But people who focus on trying to give, mostly wind up pretty happy.
PHILANTHROPY: What were some first steps?
MR. TEMPLETON: To make it quick, at Yale I was investigating what talents God gave me, and where I thought I could be most beneficial to people was to help them make fewer stupid mistakes in selecting their investments. At age 27 I formed my own investment firm, working with just five wealthy people. Eventually, when I sold out six years ago, we were helping over a million people with some part of their investments. And I felt that was a ministry, that I was doing a useful job, that I was not wasting the life God gave me. But all during that time, over 50 years, I felt that my benefit to people was not as great as if I were trying to help them get spiritual wealth.
So gradually I devised ways to do that, and the first was the Templeton Prize. I was thinking about the life of Alfred Nobel and how he had had a very beneficial influence on stimulating invention in medicine and physics and many other fields. But he had overlooked the most important field, which is that basically we are all spiritual beings. So, I decided to fill in that gap, and I convinced Prince Phillip to agree always to award the prize in Buckingham Palace.
PHILANTHROPY: Is it true that you intentionally fixed the prize amount to be larger than the Nobel Prize?
MR. TEMPLETON: I did do that, and in order to be larger than Nobel, [in 1973] it was £70,000, but this year it was £750,000, because Nobel’s money has been very wisely invested, and the Nobel Prize amount keeps going up.
PHILANTHROPY: What was it like watching Aleksandr Solzhenitsyn receive the Templeton Prize in 1983 and then proceed to attack the previous year’s recipient—Billy Graham—for, in Mr. Solzhenitsyn’s view, whitewashing some of the horrors of the Soviet Gulag?
MR. TEMPLETON: Well, let me put it this way. No human being should be so egotistical to think that what we know is the final truth. So when we find someone like Billy Graham, who has a different viewpoint from Solzhenitsyn, we should not criticize him but see if it’s possible that he has something that is useful to us, something that we have overlooked. We ought to look for the good in people who disagree with us, not the bad.
PHILANTHROPY: The bylaws of the John Templeton Foundation, created in 1987, contain a lengthy discussion of what you call “Humility in Theology.” What is “Humility in Theology”?
MR. TEMPLETON: Humility is the mother of invention, the mother of progress, and spiritual matters need that kind of progress as much as medicine or chemistry or anywhere else. It increasingly seems to me that it is egotistical to think that any human being has comprehended even 1 percent of the totality of God. Therefore we ought to try to increase our humility, we ought to try to say “How little I know” and be open to new ideas.
PHILANTHROPY: Was ensuring donor intent a consideration in your decision to put the narrative right up there in the bylaws?
MR. TEMPLETON: Definitely. I would say that many, if not most, of the great foundations have strayed from what the donor’s intent was. I did not want mine to stray. There are many donors who are doing an excellent job of helping the poor and the sick, but I wanted to help people gain spiritual insight. I want my money, not only now but also generations after I die, to be spent on something that is neglected by other people.
PHILANTHROPY: You are paying for scientists and researchers around the world to ponder the interstices of science and religion, including research into the mind-body connection. You have called this an incredibly neglected field, and one where a small amount of money could have tremendous benefits. Can you say what some of the benefits might be?
MR. TEMPLETON: A group of doctors at Georgetown University have undertaken to make medical-scientific tests about prayer. . .. This group of medical doctors is cooperating with people who are professional faith healers to find out, first, whether the person praying gets more benefit than the person prayed for. Dïes it make any difference if the person is prayed for by one person or a hundred people? Does the person doing the praying have to put his hands on the person, or can he do it from 100 miles away? Does the type of prayer matter? We don’t know the answers yet, but it will surely help the medical profession and humanity in general if we can scientifically discover the effects of prayer, and how to improve our prayers.
PHILANTHROPY: There seems to be evidence of some medical benefits from religious faith, such as the Dartmouth study that found quicker recovery from heart surgery. But wouldn’t the people who dismiss religion just accept the findings but dispute the cause behind the findings? Rather than say that God’s grace healed these people, they might say the prayer is comforting, so of course it causes their blood pressure to drop.
MR. TEMPLETON: Perhaps God’s grace involves the fact that God sustains a world where people can comfort one another through prayer.
PHILANTHROPY: Some of the arguments about the congruity of science and the existence of God are quite sophisticated, such as the analogy between the dual nature of light and the dual nature of Jesus Christ. Given the abstruseness of the science involved, are these arguments with mass appeal, or are you trying to help create a space for debate within the scientific community?
MR. TEMPLETON: Well, I would say that I am trying to encourage people to be humble. To the scientist who is an atheist because we have been up to the sky and didn’t see God, and therefore he concludes that there’s no God, I think that’s too small-minded. I want more and more scientists to think that it’s worth investigating, it’s worth doing some research in these areas that have not been researched.
PHILANTHROPY: This past fall, you paid close to $5 million to kick off a $10 million campaign for “forgiveness research.” The campaign is being co-chaired by Jimmy Carter and Archbishop Emeritus Desmond Tutu, among others, and is to fund 58 programs in areas such as how forgiveness could affect mental and physical health, conflict in families, and racial tensions. Forgiveness can help people get along if they have to, say co-workers or family members, but isn’t it a bit irrational to forgive people when there is no obvious utility in doing so, unless one has a religious motivation?
MR. TEMPLETON: Oh no. There are benefits of giving love. It’s nice to receive love, but the giving of love is the basic way to build humanity’s spiritual wealth. Give unlimited love to every human being, without exception. So, if somebody robs you at gunpoint, you don’t get angry, you pray for them while they’re doing it. So forgiveness comes automatically from teaching yourself to be a giver of love.
PHILANTHROPY: Most people would say you should conk the robber on the head, and run away. What is the utility in forgiving him?
MR. TEMPLETON: Oh, I don’t mean you shouldn’t be practical too. The fact that you love and pray for the man doesn’t mean that you shouldn’t try to escape or disarm him, or even tell the police so they can catch him. But while you are doing that there is no reason why you can’t pray for him and love him.
PHILANTHROPY: Doesn’t praying for him presuppose the existence of God?
MR. TEMPLETON: Forgiveness can be a great benefit for people who have no sense of God. Perhaps for them it can be a window into God’s grace. Forgiveness is a powerful spiritual principle for anybody. It is always practical, though sometimes complex, but it is more powerful if we understand—and love—the source.
PHILANTHROPY: Shifting gears for a moment to the investment field, when the Asian economies began to melt down last year, many predicted a wave of instability that would ripple into the U. S. market. That doesn’t seem to have happened—yet. Have we dodged a bullet, or have we not yet seen the worst?
MR. TEMPLETON: The effect of Asia on America has always been small, so you shouldn’t expect that one thing to have much effect. The importance of it is that it shows us that all freely traded markets have excesses, in both directions. They go up too high, and they go down too low. They are subject to waves of excess optimism and excess pessimism. And we had excess optimism in Japan 15 years ago. It’s been down down down and I’m not sure it’s at the bottom yet. And the same thing has happened in well over half of the world’s markets, which have gone down as much as 50 percent. Some of them have gone down 90 percent, though it has not happened in America. But that doesn’t mean it won’t happen. What we learn is that it happens everywhere, and nobody has ever found out how to know when it’s going to happen. You plan your investments on the basis that it’s going to happen, but you don’t try to decide when.
PHILANTHROPY: Over the past 40 years, you have drawn a lot of attention to the opportunities available in emerging markets. Looking ahead to the next forty years, which emerging markets interest you?
MR. TEMPLETON: There are roughly 80 places in the world with capital markets, and each one is subject to different influences. To be fairly loose, I would just say that you should have less than the “world percentage” in those markets that have not recently had a bear market. The United States for example really has had only minor bear markets for the past 17 years. The U.S. market is roughly 50 percent of the world market, so you should have less than 50 percent in a market that has not had its bear market. One country that I put money into recently is China. Chinese stocks went down to one-quarter of where they had been, and they weren’t high to begin with. And that’s because the country has numerous problems. But the prices have gone down so far that we must be near the point of maximum pessimism. And there are plenty of reasons to think that, over the next 10 to 20 years, the increase in income in China will be greater than America.
PHILANTHROPY: So you are still investing?
MR. TEMPLETON: I am trying to devote 100 percent of my time to the programs we support, but my foundations do have assets and I have not hired outsiders to manage those assets.
PHILANTHROPY: Should people manage the assets of a foundation differently than their own personal assets? Are there strategies that are more appropriate for one, but not the other?
MR. TEMPLETON: In general they are the same, except of course that the foundation has no income tax to consider. The documents of my foundation specify that after I am dead, 95 percent of the foundation investments should be managed by the wisest possible people, that the foundation staff should not try to select investments, because they don’t know enough. And the wisest investment fund managers today are mutual fund managers, because [mutual funds] pay more. So you select roughly five of the best-managed mutual funds, and you concentrate on the mutual funds where they give a wise manager wide latitude.
PHILANTHROPY: Does the John Templeton Foundation invest in mutual funds?
MR. TEMPLETON: Yes, it’s already to some extent following the course I just described.
PHILANTHROPY: Index funds have become enormously popular, and have beaten the returns of most managed funds over the past few years. Is this an ephemeral phenomenon, fueled by the remarkable recent performance of the blue chips, which are heavily weighted in the index?
MR. TEMPLETON: Yes. There is a vast amount of new investment by people who don’t know what they are doing, so the stocks of famous businesses have been bid up much more than unknown businesses or unknown nations. It would not be wise to invest in an index fund that specializes in big companies.