Defiant Fund Discontinues Grant Scheme for Entrepreneurial Black Women Due to Court Settlement
The controversy arose two months following a US appeals court instructing the Atlanta-based Fearless Fund to pause the Strivers Grant Competition, a program offering $20,000 to businesses predominantly owned by Black women. In a 2-1 verdict, the appeals court opined that the American Alliance for Equal Rights, led by conservative activist Ed Blum, was likely to succeed in its lawsuit alleging racial discrimination.
The ongoing legal challenge against the Fearless Fund, a well-known Atlanta organization that has contributed to the growth of popular businesses like Thirteen Lune and Slutty Vegan, has garnered significant attention as a potential litmus test in the escalating legal battle waged by conservative groups against corporate diversity initiatives.
Capitalizing on the Supreme Court verdict that discontinued affirmative action in college admissions, conservatives have pursued lawsuits against numerous corporations and public institutions, criticizing a myriad of diversity, equity, and inclusion (DEI) promotions.
In an announcement, Blum, also responsible for the affirmative action ruling, reiterated his stance that "race-specific initiatives such as the one promoted by the Fearless Fund are divisive and unlawful."
Making a statement, Arian Simone, CEO and co-founder of the Fearless Fund, conveyed her satisfaction in concluding the lawsuit and continuing with the organization's objective of supporting and empowering entrepreneurs from the Black and brown communities.
Thus far, no anti-DEI lawsuits have initiated a pre-eminent ruling at par with the Supreme Court affirmative action decision. According to Ben Crump, a civil rights lawyer representing the Fearless Fund, the settlement prevented the emergence of a precedent-setting ruling that could have curtailed race-based funding.
Crump declared in a statement, "By strategically steering clear of a Supreme Court ruling that may have nullified race-oriented funding, we preserved crucial prospects for the entire Black and brown populace."
Furthermore, an increasing number of corporations – most recently Lowe’s and John Deere – have revised or abandoned DEI programs amidst a barrage of lawsuits and conservative activist pressure.
In a statement, Blum expressed hope that "race-specific projects like the one from the Fearless Fund would cease operation and be accessible to everyone, regardless of their race." Adding that he encouraged the Fearless Fund to expand the Strivers Grant Competition to women of all races instead of terminating it. Other companies, including several law firms that Blum has sued, have reformed scholarships or fellowships to become all-inclusive.
Alphonso David, president and CEO of The Global Black Economic Forum and advocacy consultant for the Fearless Fund, retorted in an interview with The Associated Press that "the Fearless Fund would not allow Ed Blum to dictate their business strategies." David explained that the Strivers Grant was a minor component of the Fearless Fund's activities and had already been scheduled for closure. He deemed the settlement "narrow" and specified that it would not influence the venture capital firm's investments or additional endeavors.
Announcing a new $200 million debt fund to offer loans ranging from $5,000 to $250,000 to "under-resourced entrepreneurs," Simone indicated Wednesday that the Fearless Fund would continue its mission to address the considerable disparity in funding for businesses owned by women of color.
David Glasgow, executive director of the Meltzer Center for Diversity, Inclusion, and Belonging at New York University’s School of Law, suggested that the decision to settle the lawsuit was not unexpected because “the risk you are taking in instances such as this is that should you continue fighting, you may obtain more detrimental judgments that could cause broader damage.”
“Clearly, people are recognizing the direction the six-justice conservative majority in the Supreme Court would take in DEI-related cases," Glasgow explained.
The Fearless Fund case and similar lawsuits have illuminated profound disagreements within the judicial system on the topic of DEI.
Two judges, introduced to the US Court of Appeals for the 11th Circuit in Miami during the tenure of former President Donald Trump, concurred with Blum's argument that the grant program violates section 1981 of the 1866 Civil Rights Act, which outlaws racial discrimination during contract enforcement. The Act, enacted during the Reconstruction era, initially aimed to shield formerly enslaved peoples from economic exclusion; however, anti-affirmative action activists have employed it to challenge programs designed to assist minority-owned ventures.
In sharp contrast, Judge Robin Rosenbaum, an appointee of former President Barack Obama, stated that none of the plaintiffs represented by Blum demonstrated genuine interest in applying for the grants and likened their claims of damage to soccer players feigning injury by "dive-rolling on the field."
The Fearless Fund, acknowledging the ongoing legal challenge and the potential impact on their mission, decided to revise their strategies to ensure they maintain their commitment to supporting Black and brown entrepreneurs, despite the pressure from conservative groups like those led by Ed Blum.
Moving forward, the US appeals court decision has prompted discussions within the organization, with a focus on ensuring that their efforts to empower under-resourced entrepreus, primarily women of color, continue unhindered. [Us]
