Robin Hood Fund Comes Under Congressional Scrutiny

The Robin Hood Foundation, which works to alleviate poverty in New York, is facing scrutiny from Congress for its “rainy day fund,” which has grown to $144.5-million — up from $20-million — in less than a decade, reports Bloomberg News.

About half the money in the fund is invested in hedge funds run by Robin Hood donors or board members, who have been paid a fee of 2 percent of assets and 20 percent of profit for managing the donations.

While there is nothing illegal about the payments, says Sen. Charles E. Grassley, of Iowa, the lead Republican on the Senate Finance Committee, “I don’t remember Robin Hood keeping two and 20 as his cut.”

Lawmakers say the payments may create an appearance of conflict as both the House and Senate consider legislation that would tighten regulation and raise taxes on hedge funds and private-equity firms.

But David Saltzman, Robin Hood’s executive director, says the arrangement is an appropriate one because the money managers have proven track records of returns that outperform other investments.