Remembering the Tenth Amendment

A chapter in the standoff between the federal government and the country’s top universities has come to a close. Some universities capitulated quickly to keep the federal manna falling. But others sued, as they want their public ducats without having to follow government mandates.  

In September, a federal district court judge ruled in favor of Harvard University, finding that the Trump administration had used “antisemitism as a smokescreen” to remove research funding under federal civil rights law (President and Fellows of Harvard College v. United States Department of Health and Human Services et al., US District Court for the District of Massachusetts, Case No. 1:25-cv-11048).  

A few years ago, this same judge rejected the lawsuit by Asian-American applicants against Harvard University, in which plaintiffs claimed that Harvard’s race-based admissions discriminated against them. That case was later decided in favor of the plaintiffs by the US Supreme Court (Students for Fair Admissions, Inc. v. President and Fellows of Harvard College et al., 600 U.S. 181, 2023). It is thus unlikely that we have heard the last of the federal funding cases. Just last week, a report in Higher Ed Dive concluded with these words from one of the attorneys advising universities: “You never want to say ‘Lay low,’ but that is my advice now because you don’t want to end up on the administration’s radar. No one wants to be the first non-elite school that goes out of business.”

As the lawyers catch their brief before the next round of Departmental Letters, Lawsuits, and Appeals, the talking heads can now comment. In that spirit, I was surprised to discover that the Cato Institute had filed an amicus brief in support of Harvard’s lawsuit.

The brief argues that academic freedom holds a special place within the protection of free speech. The government may not impose ideological requirements on “the four essential freedoms of a university— to determine for itself on academic grounds who may teach, what may be taught, how it shall be taught, and who may be admitted to study.”  

Before discussing the principles involved, it helps to step back and discuss donor intent.

Donor Intent and Grant Refusal

Donations come with conditions or goals. A donation to a university might be earmarked for general operations, or for a specific program, research agenda, named building, or cause. A donor might want to support Austrian economics or a center for the study of poverty, or endow a Jewish student center or a women’s studies program. A grant might simply support the addition of a specific book to a course. 

A university might not be able to honor a donation. For example, it might not have the capacity to establish a new department and might ask instead for support of a new major or minor.  It might reject a grant if the conditions are too onerous. Maybe the university doesn’t need a separate college of entrepreneurship when it already has an entrepreneurship department within the college of business; it might counterpropose support for the existing department.  Donor conditions can also lead to rejection of a grant. Perhaps Atlas Shrugged is deemed too capitalist. Perhaps Mein Kampf is an offensive bridge too far (ironically, The Communist Manifesto is the most assigned book on US campuses… never mind the mass murders of international socialism). 

Just as a university can refuse a grant or negotiate its terms, so can a donor refuse a counteroffer. A new school, or a specific program, or inclusion of a book, might be a non-negotiable condition for a grant.

Changing Funding

Just as a donor can decline to make an initial grant, it might change its funding decisions over time.

A donor might shift funding goals, as its board identifies more pressing concerns, or alter its priorities.  A change in circumstances (an increase in national poverty?), a high-profile issue (heavy-handed ICE enforcement?), or a deregulatory opportunity (school choice?) might shift a donor’s attention. A donor might assess that the original funding goal (a five-year grant to launch an institute?) has been achieved, and it’s time to find other projects.

A donor might cease to support a program whose identity has changed radically.  I suspect the University of Chicago economics department saw its donor base shift when it ceased to be the home of Chicago Economics and became “simply” a top-five department without a distinct identity.  

A donor might request reimbursement of funds that were not used according to donor intent (perhaps earmarked funds diverted into general operating budgets or the university president’s pet project). Take the example of the University of Missouri. It received a multi-million dollar grant to hire “dedicated and articulate disciple[s] of the Ludwig von Mises Austrian School of Economics”… then proceeded to hire professors who knew nothing about Austrian economics. It was sued and had to pay up. Likewise, I was once asked to purchase a camera (for general marketing of the College of Business) out of an endowment created for “the study of capitalism and free enterprise.” As I needed to stay in the dean’s good graces, I made a donation from my own pocket to buy the camera. But I refused to violate donor intent by using my endowment.

A donor might withhold support because of ideological differences. This was the case with apartheid divestment. Donors might stop funding a university whose president just couldn’t give a straight answer about whether calling for the genocide of Jews was a violation of her university’s policies. Many schools persist with racist admissions policies (despite the Supreme Court’s ruling in Students for Fair Admissions).  George Mason University was recently caught engaging in race-based hiring (ironically, while waging a performative anti-racist campaign). Donors are likely to react—although, in both cases, it’s unclear whether donations will increase or decrease… The donor base at New College of Florida surely looked different before and after the 2023 change of direction, from DEI to conservative. I have ceased to support my own alma mater, Georgetown University, as it has made a steady shift from Jesuit cosmopolitanism to shameless DEI—and fell, a few years ago, to the bottom four of American universities for free speech. In a business parallel, the board of directors of BB&T bank refused to authorize loans for the development of properties acquired through eminent domain, after Kelo v. City of New London (545 US 469, 2005).  

But Isn’t the Government Different?

There is a widespread belief that the federal government is different from other donors. Federal funding is widely considered to be a public good, to be protected from politics and subject to First Amendment protections.

Think, instead, of the federal government as just another donor. Instead of a grants committee, the federal government has Congress; instead of grants officers, it has executive cabinets and agencies. Like any donor, Congress can change funding priorities. And like any grants officer, the executive can determine if recipients are complying with donor intent.

But there’s more. While protection of donor intent varies state by state, the federal government is explicitly instructed by law to withhold funding for non-compliance with civil rights law.  

Unfortunately, the federal government often violates one set of constitutional principles to enforce another. In its attempt to curb sexual assault and sexism on campus, the Obama administration dangerously curtailed due process and free speech, while also threatening suspension of funding.  

Likewise, the federal government’s attempts to curb racial discrimination can be problematic. Take the example of Hillsdale College. Hillsdale had racially blind admissions when there was still slavery in the US. During World War I, it attempted to integrate its ROTC, only to be rebuked by the federal government. Sixty years later, the College naturally chafed at directives to count students by the color of their skin or to engage in racial preferences. As then-president George Roche wrote: “This is obnoxious. The student’s race and gender are of no concern to the educator. To the contrary, one function of a liberal arts education is to overcome such invidious distinctions and to promote a civilized, color-blind, harmonious order.”  

In 1983, the Supreme Court ruled as follows in Grove City College v. Bell (465 US 555, 1984; see the full story here and here):

1. Title IX of the Education Acts of 1972 did indeed apply to the College, even though it accepted no direct assistance, but did enroll students who received federal financial aid.
2. Under Title IX, as it was written, the program receiving federal support was the College’s financial aid program, and not the entire College. The federal government had power (including termination of funding) only over the specific program, and not over the entire institution.   

• “Requiring the College to comply with Title IX’s prohibition of discrimination as a condition for its continued eligibility to participate in the [financial aid] program infringes no First Amendment rights of the College or its students” (emphasis added).

In response, furious Congressional Democrats passed the 1987 Civil Rights Restoration Act over President Reagan’s veto. This changed Bell’s “program-specific” doctrine, giving the federal government the power to suspend funding if there was alleged discrimination anywhere within the recipient institution. In a truly bipartisan effort, subsequent presidential administrations of both parties have wielded the CRRA to advance their shifting visions of civil rights. 

What’s a University President to Do?

Clark Kerr, head of the University of California system, famously summarized the job of a university president: “I find that the three major administrative problems on a campus are sex for the students, athletics for the alumni, and parking for the faculty.” We can now add at least a fourth:  a federal government imposing big conditions that change with every administration.  

What can beleaguered university presidents do in the face of current federal pressure?

Surrender is the path of least resistance. The federal honeypot is just too enticing. Columbia—an early capitulator—receives 20% of its revenue from the government. As George Liebemann wrote last March: “the Columbia University administration has predictably been negotiating with Washington the terms on which it will surrender the free speech rights of its students and faculty.” Surrender avoids deeper questions like free speech, DEI, and equality. Then again, surrender is a long game. Indeed, the US government is run by executive whimsy so that the universities can surrender, keep their funding, and wait for a more sympathetic president… then return to their old ways.

The second option is to fight. Princeton University President Christopher Eisgruber argues that “universities and their leaders should speak up and litigate forcefully to protect their rights.” This is a classic Baptists and Bootleggers strategy, allowing universities to get pork without strings, while claiming the mantle of free speech.  

The third option is legislative action. University presidents could learn from the Congressional Democrats in the 1980s. When the Court ruled that the law, as written, did not grant the government university-wide power, they simply rewrote the law. This is currently impossible, given the current Congress. Besides, the universities—which were silent when the Obama administration curtailed due process and free speech—want the Trump administration to leave them alone. But they don’t want to remove the CRRA from the quiver of a future president who shares their values.

The fourth option is to stand on principle. Universities can reject funds on any number of ideological grounds, from unsavory donors to unethical intent or intellectual incompatibility. I would refuse a junket to Hungary funded by the Orban government. I teach the slow but steady erosion of racism in the Enlightenment project, but I would refuse a grant to teach critical race theory. Some schools reject Koch funding (they are misguided, if ethically consistent). If a university considers that the cost of keeping its snouts in the federal trough is unacceptable, it has the option to walk away.

Finally, universities (and especially the Ivies) could use their bully pulpit and intellectual leadership to challenge federal presence in education. This would present a good opportunity for a national conversation. Alas, the universities want to have their cake and eat it too. As I wrote recently, most Americans don’t want a king… unless it’s their king.  George Liebmann points out the irony of the current predicament: “Liberals… regard the Trump administration’s action with outrage, but they have failed to identify its cause and cure. If they looked harder, they would find that the power of a president to withhold federal funds over perceived civil rights violations exists only thanks to righteous progressive lobbying.” He concludes: “They didn’t imagine that one day their civil rights power would be wielded in ways they would not personally endorse.”  

Public Choice 101

Messrs. Buchanan and Congleton longed for “politics by principle, not interest.” Unfortunately, interests are strong, and we need not dig terribly far into Mancur Olson’s theory of concentrated benefits and diffuse costs. In 2023, the federal government funded 55% of university research. Adding other support, the average American university receives 10% to 15% of its operating expenses from the federal government; some receive as much as 50%. We are unlikely to see principled action that might endanger the patrocinium pork.

I am not surprised by the behavior of America’s universities. I am also not surprised that the Trump administration’s legal basis was found to be flimsy. I am, however, surprised by Cato’s curious amicus. Federal support of education is not authorized by the Constitution. Instead of rearranging the deckchairs on the Titanic of unintended consequences, we should be addressing the root causes. This is not a First Amendment case. It’s a Tenth Amendment case.  

Oh. And yes…  Clark Neily remains an intellectual hero. And Cato remains in my will.