Chauncey L. Waddell, an investment banker and philanthropist, died Wednesday at the New York Hospital - Cornell Medical Center. He was 88 years old and lived in Manhattan.

Mr. Waddell was a co-founder and former chairman and president of Waddell & Reed Inc., a securities investment concern of Kansas City, Mo. When he retired in 1969, Waddell & Reed was one of the country's largest mutual fund management companies.

Mr. Waddell and the late Cameron K. Reed founded the company in the 1930's. He and Mr. Reed also founded the United Investors Life Insurance Company of Kansas City. In addition, Mr. Waddell was a former chairman of United Funds Inc., a mutual funds complex in Kansas City.

Mr. Waddell, the son-in-law of Charles Evans Hughes, was active in educational organizations, particularly those concerned with opportunities for minorities.

In the 1940's, under Mayor Fiorello H. La Guardia, he was on the executive committee of the New York City Board of Higher Education. He was also a former director of the United Negro College Fund and a director of the NAACP Legal Defense and Educational Fund.

In addition he served on the boards of Atlanta University; Spelman and Morehouse Colleges, both in Atlanta, and the National Medical Fellowships, which provides tuition and stipends for minority medical students.

In 1962, Mr. Waddell established the Charles Evans Hughes Memorial Foundation, which aids three philanthropic interests of Mr. Hughes, a Chief Justice of the United States, Secretary of State and Governor of New York. The three philanthropic interests are education, legal aid and the combating of racial and religious prejudice.

Mr. Waddell was born in Greenfield, Ohio, and graduated from Harvard College. He left Harvard to serve in World War I as an Army air pilot. He was a securities analyst with Dillon Read & Company, the New York investment banking company, before establishing his own concern.

Mr. Waddell's wife, Catherine Hughes Waddell, died in 1961. He is survived by a son, Theodore H., of Santa Fe, N.M., and five grandchildren.

A version of this article appears in print on July 3, 1984, Section B, Page 8 of the National edition of the New York Times with the headline: CHAUNCEY WADDELL, INVESTMENT BANKER AND PHILANTHROPIST.