John Templeton was one of the great investors of the 20th century, making many hundreds of millions of dollars for himself and those whose funds he managed. But his name is perhaps better known for the way he gave his fortune away.

The Templeton Prize for Progress towards Research or Discoveries about Spiritual Realities, initially known as the Templeton prize for Progress in Religion, is the world’s richest individual Prize, always set higher than the Nobel and currently worth £820,000. Its distinguished but highly eclectic recipients have included Mother Teresa, the cosmologist John Barrow, the environmental ethicist Holmes Rolston, the philosopher Charles Taylor, Billy Graham, Aleksandr Solzhenitsyn and Charles Colson, the Nixon aide imprisoned for his role in Watergate (he later founded a prison outreach programme).

The two sides of his public career were united by Templeton’s highly individual personality, characterised by a determination to go against the crowd. Although he insisted that his investment strategy was based on common sense, it was as much about ignoring conventional wisdom. One of his favourite maxims was that he invested at “the point of maximum pessimism”; when everyone else was selling a stock, he bought it. It worked more often than not — consistently over 50 years his fund averaged an annual return of 13.8 per cent, comfortably ahead of the Standard & Poor’s average of 11.1 per cent.

Although Templeton was a firm Presbyterian, who opened every business meeting with a prayer, his religious views were similarly idiosyncratic, marked by an unwavering belief in spiritual progress.

“I’m one of the few people in the world who don’t hesitate to say that spiritual information will multiply one hundredfold,” he said.

He believed, however, that spiritual advances should compare with those in the physical sciences. “If you have a spiritual problem, a priest will give you advice out of the Bible, which is 2,000 years old,” he said. “If you have a medical problem, you don’t go to a doctor and expect him to find a cure in Hippocrates.”

Through the foundation he established he aimed to hasten spiritual progress, believing it to be the most urgent issue facing humanity.

John Marks Templeton was born in small town Tennessee in 1912, and once recalled the excitement felt when electricity arrived in the town. He went on to Yale but his father, a lawyer and cotton grower, was ruined in the Depression.

“I thought it was a tragedy but it turned out to be a marvellous benefit,” Templeton would later say. Denied parental support, he was forced to take a variety of jobs and work harder to get scholarships.

The result was a Rhodes scholarship to Oxford, which he took up after graduating in 1934. “When I got to Balliol they asked what I would want to read,” he once said. “I said business management. They looked at me as if I wanted to study garbage.” He studied law instead. Five decades later he endowed the Oxford Centre for Management Studies and it became Templeton College.

After touring the world on a shoestring, Templeton started on Wall Street in the late 1930s. He was not an immediate success, but his break came when Hitler invaded Poland. Templeton realised that a big war was coming and that this would eventually drive up the market. Borrowing $10,000, he bought $100 worth of stock in every company trading at under $1 a share, a total of 104 companies; 37 of them were in bankruptcy. His reasoning was simple: “During war, everything that was in surplus, and therefore unprofitable, becomes scarce and profitable. Three years later I had a profit on 100 out of the 104.”

In 1954 he entered the mutual fund industry with the Templeton Growth Fund, incorporated in Canada which did not have a capital gains tax, and became a pioneer of investments in companies outside the US, most notably Japan. He bought shares in such little-known companies as Hitachi and Fuji. “We never paid more than three times earnings”, he said. By the late 1980s some of these stocks were trading at 68 times earnings. Templeton was also an early investor in China.