University of Missouri, Hillsdale College settle lawsuit about donor’s request for free-market economic professors

After five months of negotiations, the University of Missouri and Hillsdale College have settled a lawsuit surrounding a donor’s bequest to the University of Missouri. Hillsdale sued the University of Missouri and alleged that the latter misused a deceased donor’s funds. The public university, known as “Mizzou” to some, allegedly falsified reports that it had complied with the donor’s bequest.

Hillsdale College is a small, liberal-arts institution in the rural town of Hillsdale, Michigan and is home to Ludwig von Mises’ personal library.

As background, Sherlock Hibbs donated $5 million to Hillsdale College in 2002. He stipulated that Hillsdale College donate the funds to his alma mater, the University of Missouri, to fund six free-market economics professorships at the university’s Trulaske College of Business. Also required was that every four years, Mizzou was required to certify that it filled each professorship with a “dedicated and articulate disciple of the Ludwig von Mises (Austrian) School of Economics.” If not, Mizzou would have to send the funds back to Hillsdale College. Hillsdale College accused the University of Missouri, based on internal e-mails, of knowingly submitting falsified information that it had complied with the bequest’s requirements.

Hibbs has since passed away, but both higher education institutions must legally abide by the terms of his bequest or risk having to send the funds back to the donor’s estate, or in this case, Hillsdale College. Hillsdale sought the original $5 million grant and any additional gains on the bequest, which could total in the tens of millions of dollars.

As a part of the settlement, both institutions agreed to split the endowment, which is valued at about $9.2 million. Also, Hillsdale will no longer have oversight of the bequest. Officially, both parties “agreed to disagree” and a University of Missouri spokesman said that it was the best decision for both parties to settle the lawsuit.

Mizzou is no stranger to controversy. In 2015, the university was embroiled by a scandal when black students claimed the administration did not respond adequately to racial bias incidents on the university’s campus. During one demonstration, a journalism professor named Melissa Click called for “muscle” to stop a student journalist from reporting on the demonstration (Click was later fired by the university). The following year, Mizzou suffered from the negative blowback from the protests and how it handled them, with enrollment dropping by 12% between 2015 and 2017 (while the budget deficit increased), temporary closing of dormitory halls, and laying off staff.

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