A conservative college in Michigan says MU must forfeit a $5 million gift from alum

The University of Missouri could lose a $5 million gift in a lawsuit filed by a small college in Michigan.
The University of Missouri could lose a $5 million gift in a lawsuit filed by a small college in Michigan. University of Missouri

A small conservative college in Michigan is going to court to take away $5 million that was given to the University of Missouri by an alum 17 years ago.

Hillsdale College claims MU is not spending the money in the way its giver intended.

The endowed gift was left to MU in the will of Wall Street financier Sherlock Hibbs, who gave the money on the condition that it be used to employ six professorships, or chairs, who are “dedicated and articulate disciples of the free and open market economy.” They must follow the Ludwig von Mises Austrian School of Economics, he stipulated, teaching laissez-faire policies. In other words, no government interference.

Hibbs, a 1926 Mizzou graduate who died in 2002 at age 98, required that MU set up three $1.1 million chairs, as well as three other distinguished professorships — two of those funded at $567,000 and one at $566,000.

Should the university not abide by the terms of the gift, Hibbs’ will says MU would forfeit the money and it would go to Hillsdale, a 1,500-student liberal arts college supported by some of Washington’s top conservatives, including U.S. Secretary of Education Betsy DeVos. Vice President Mike Pence gave the commencement address there last year.

The New York Times in 2017 called the college “a shining city on a hill for conservatives,” with a statue of President Ronald Reagan along the school’s “Liberty Walk.” At one point, President Donald Trump had even considered Hillsdale’s president, Larry P. Arnn, for the secretary of education post.

The lawsuit claims MU found the terms of the gift “distasteful” and was concerned that its Trulaske College of Business was being “held hostage by a particular ideology.”

Former Missouri Gov. Jay Nixon is representing a conservative college suing the University of Missouri. File photo

“The truth is that University of Missouri never embraced this responsibility of teaching this philosophy,” said Hillsdale’s attorney in the suit, Jay Nixon, an MU alum and the former Democratic governor of Missouri. “I think that the evidence will show that.”

Not so, said MU officials.

“We take responsibility to fulfill our donors’ wishes and we feel we have done so with every gift,” said Christian Basi, university spokesman. Basi said the case has nothing to do with political ideology. He said that every year MU has sent Hillsdale a letter signed by the endowed professors and chairs attesting that they are teaching in a way consistent with the stipulations in Hibbs’ will.

A letter sent on May 15, 2018, is signed by seven professors saying that individually and collectively they “have demonstrated a commitment to and have promoted numerous principles associated with the Austrian School of Economics.”

The letter form MU professors is not enough assurance for Hillsdale.

“Signing a piece of paper is a long way from actually doing what is in the will,” Nixon said.

Hillsdale originally filed the suit in St. Louis County Circuit Court, and it was recently moved to Boone County, where the university is located.

Currently only four of the six bequeathed positions are filled because two professors left at the end of the last semester. The endowment is funding positions held by Lisa Schneer, Daniel Turban, Karen Schnatterly and Rhonda Reger.

Since Hibbs’ endowment was invested, it has grown to about $9 million, Basi said. The university has spent roughly $4 million on salaries for those chairs. Basi said the university is now looking for professors to fill the empty posts. Hibbs’ will stipulates that none of the positions can remain vacant for more than five years.

Nixon said public schools must take care to follow such requests because they are relying more and more on private dollars. Hillsdale is only fulfilling its responsibility at the bequest of the donor, he said.

If Hillsdale were to win this lawsuit it could very well look to some other school to carry out the wishes in Hibbs’ will.

“Hillsdale is not into making money out of this,” Nixon said. “Hillsdale is committed to making sure the bequest of Mr. Hibbs is carried out.”

MU was not the only school that Hibbs left money to. He gave $1.3 million to Hillsdale, $800,000 to Cottey College in Nevada, Missouri, and $750,000 to the University of Kansas. In each case the gift was directed to hire a professor teaching the Austrian economics philosophy.