As previously reported, the efforts, and perhaps the existence of the Fearless Fund have been the target of a lawsuit since July of 2023. We at Philanthropy Women have been tracking this case as it has significant ramifications for all marginalized populations receiving philanthropy dollars, including gender justice philanthropy.
On June 3, 2024, the U.S. Court of Appeals for the Eleventh Circuit issued a ruling that will prohibit the Fearless Fund from issuing its Strivers Grants. These are grants of $20,000 given to small businesses that have at least one woman of color in a leadership role.
Arian Simone, Co-founder and CEO of the Fearless fund described herself as “outraged” and said the fund is weighing its legal options going forward. They may take the case to the Supreme Court, or they could also take the route of taking the case to another district appellate court.
The court ruled that restricting the applicant pool to Women of Color is discriminatory, violating the federal prohibition on racial discrimination in public and private contracting as set out in the 1964 Civil Rights Act, 42 U.S.C. § 1981.
While the lawsuit had attracted some national attention from Time and other publications, the announcement of the ruling was not front-page news in most places. In fact, the story was largely ignored by the mainstream media. The Associated Press (AP) carried the story, but only because of funds AP received from Pivotal Ventures, the organization founded by Melinda French Gates. In other words, AP had to be paid to run the story.
The ruling is indicative of the lack of concern faced by women in general and women of color in particular, who received less than 0.5% of the $140.4 billion of venture capital funding of U.S. startups last year. Even that miniscule amount represented a high point of funding for WOC that resulted from the Black Lives Matter movement of 2020.
The grants were an effort to address this scarcity of venture capital to Women of Color. Fearless Fund was founded in 2019 by Arian Simone and Ayana Parsons.
Ayana Parsons has resigned her position with Fearless Fund in the wake of the decision.
The ruling is the result of a lawsuit brought against the Fearless Fund by the American Alliance for Equal Rights (AAER) which is led by anti-affirmative activist Edward Blum. AAER is the same prominent conservative organization that convinced the Supreme Court to reject affirmative action criteria for college admissions in June 2023.
This lawsuit is one part of a much broader effort of conservative zealots to overturn any gains made by the Civil Rights movement of the last 60 years. Attention to the way the Supreme Court was stacked by Republicans often distracts from the fact that the Trump administration, abetted by then-Senate Majority leader Mitch McConnell to fill as many judgeships as possible. This came after McConnell’s refusal to fill the same vacancies with candidates proposed in the last years of the Obama administration. Elections matter.
This ruling furthers the goal of eliminating all affirmative action programs, whether in government or even in private industry. Many corporations have reduced, de-emphasized, or wholly eliminated programs to encourage Diversity, Equity and Inclusion for fear of becoming a target of AAER.
The impact on targeted philanthropy is expected to be chilling. Some members of the philanthropic community have urged the community not to be deterred by the decision.
Links:
The acknowledgement of funds received by AP can be found at the bottom of the article.
“The Associated Press’ women in the workforce and state government coverage receives financial support from Pivotal Ventures. AP is solely responsible for all content. Find AP’s standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org.”
The full article can be found at this link:
https://apnews.com/article/fearless-fund-dei-backlash-dab43ae98158a0bd6175fa64fa79bcfd
To read the court’s decision, see this link.
For the story in Heragenda see this link:
https://heragenda.com/p/reactions-fearless-fund-blocked-in-federal-lawsuit-ruling
To read the Reuters story, use this link:
The Council on Foundations had this to say:
https://cof.org/page/fearless-fund-case-summary
To read legal analyses of the decision, see the websites of the law firms cited for this article below:
Arnold & Porter: https://www.arnoldporter.com/en/perspectives/advisories/2024/06/the-eleventh-circuits-fearless-fund-decision
Patterson Belknap:
https://www.pbwt.com/publications/fearless-fund-decision-may-impact-race-based-grantmaking
