What's America's Highest Paid Hedge Fund Manager Doing with All That Money?

For three years running, David Tepper has earned the title of highest paid hedge fund manager in America, which likely makes him the highest paid person in the world. Raking in $3.5 billion in 2013 alone, Tepper's fortune has ballooned to over $10 billion in recent years. And at just 55, he's not likely to slow down any time soon, though his increasing wealth has caused him to become increasingly serious about his philanthropy.

This isn't to say Tepper hasn't been serious about philanthropy for a long time. The David Tepper Charitable Foundation was created way back in 1997, just four years after he started his own hedge fund, Appaloosa Management, much earlier in his career than many of his counterparts, and certainly before he started making billions. 

So what is Tepper doing with all that money? His biggest donations by far have gone to Carnegie Mellon's business school, which he attended, and which is now named after him. The school has received more than $125 million. (Here's a great line for B-students who are full of themselves: "Some day this place will be named after me!")

He and his wife Marlene are big into education in general, having also made sizeable donations to the University of Pittsburgh, Rutgers University's Mason Gross School of Arts (Marlene's alma mater), and Teach for America.

Smaller, but still substantial grants have also been made to organizations like New Jersey After 3, an after school education program, Jump Start Young Children, and a number of other private and charter schools. Tepper even has his own Political Action Committee, Better Education for Kids, which and he another Jersey hedge fund guy, Alan Fournier, have set up to push for education reform in New Jersey. Also with Fournier, Tepper gave $3 million in 2014 to help set up an institute in Jersey City that will train principals for the district's public schools.

Aside from education, the Teppers' main cause seems to be poverty, and specifically, hunger.  He's on the board of the Robin Hood Foundation, where he's donated millions to fighting poverty in New York. He's given to the Community Food Bank of New Jersey, and also given generously to Feeding America, a national organization, as well as hundreds of thousands to a number of other food banks in and around his New Jersey community, and in Pittsburgh where he grew up.

The Teppers are also somewhat active in the Jewish community, though not as much as many of his financial counterparts. His biggest donation in this area went to the United Jewish Appeal of Metrowest, NJ, which received $1 million in 2006, and has gotten several other donations in the hundreds of thousands of dollars. He's also given smaller donations to Chabad on Campus, Hillel, Birthright Israel, and the Rabbinical College of America. While most of this giving appears to be education related, the couple also supports the Washington Institute for Near East Policy. 

There is some money going to health-related causes as well, though it does not seem as if the Teppers champion any particular cause. Their largest donation in this area has been to the Phoenix House, a drug abuse rehabilitation center, which generally receives over $100,000 on an annual basis. Aside from this, however, their giving in this area has been limited to token donations, generally in the $25,000-$50,000 range, to leading organizations that support research and awareness for a variety of diseases, such as the American Cancer Society, the American Heart Association, the Parkinson's Disease Foundation, Ace Lymphoma, and the Cystic Fibrosis Foundation. While the amounts may not be huge, the good news is that a lot of different organizations receive funding. 

On the international side, they regularly make gifts of over $100,000 to CARE, an organization that deals with a variety of issues, including disaster relief, poverty, hunger, education, economic development and women's empowerment.  

All told, the Teppers have been giving away $2-3 million per year for over a decade, a number that has climbed to $6 million in recent years, mostly by an increase in the number of organizations they support, giving anywhere from a few thousand to a few hundred thousand, with most in the $25,000-$100,000 range.

Though the David Tepper Charitable Foundation now sits on more than $120 million in assets, there appears to be a bit of a lag between the increase in his personal wealth and the increase in his philanthropy. This is not really all that uncommon, especially among those in the prime of their careers; still, given Tepper's history, we do expect to see more significant contributions sooner rather than later.

Organizations that focus on more broad-reaching solutions to hunger and education in particular may have a good chance right now of building a relationship with Tepper and his charitable foundation, which may prove highly beneficial, especially considering that the Teppers tend to give to the same organizations year after year. 

See David Tepper's full profile