Fearless Fund: The Ongoing Battle for Black Women. Legal Tensions Rise Over Diversity Initiatives for Black Female Businesses.
NEW YORK – Recently, the corporate landscape has seen increasing debate over diversity-focused programs. A prime example of this came when a federal appeals court temporarily halted a grant initiative aimed at businesses led by Black women. The 2-1 verdict by the 11th U.S. Circuit Court of Appeals in Atlanta has put a momentary pause on the operations of the Strivers Grant Contest, an initiative by the Fearless Fund. This contest proposed a significant $20,000 award to businesses predominantly owned by Black women (a 51% ownership minimum), provided they meet other specified criteria.
This past Sunday, the Fearless Fund responded to the verdict, promising to adhere to the order while maintaining their confidence in eventually overcoming the lawsuit. The litigation was initiated by the American Alliance for Equal Rights, spearheaded by conservative figure Edward Blum. The central argument presented is that the grant contravenes a specific clause of the Civil Rights Act of 1866 which forbids racial discrimination in contract dealings. In their public statement, the Fearless Fund expressed, “We strongly disagree with the decision and remain resolute in our mission and commitment to address the unacceptable disparities that exist for Black women and other women of color in the venture capital space.”
Earlier this week, U.S. District Judge Thomas W. Thrash denied the request by the American Alliance to suspend the program. However, the majority of the three-judge panel subsequently argued that the Fearless Fund’s scheme is racially exclusionary, indicating the potential for Blum’s group to succeed in the lawsuit.
In contrast, Judge Charles R. Wilson voiced a stark dissent. He posited that invoking the 1866 act against the Fearless Fund’s program is misguided. Emphasizing the act’s roots in the Reconstruction era, Wilson pointed out that it aimed to shield Black individuals from economic discrimination. He questioned the lawsuit’s likelihood of success.
This legal tug-of-war is now viewed as a potential precedent-setter, especially as discussions around racial considerations intensify in professional settings, mirroring the U.S. Supreme Court’s recent verdict ceasing affirmative action in academic admissions.
It’s crucial to highlight that the Strivers Grant Contest isn’t the sole program led by the Fearless Fund. Their mission has been to address the evident funding disparities faced by Black female entrepreneurs, a demographic that garners less than 1% of venture capital funding. The grant qualifications stipulate that eligible businesses should be predominantly owned by a Black woman.
In defense against this lawsuit, the Fearless Fund has sought the expertise of noted civil rights attorneys, such as Ben Crump. Their primary contention is that these grants aren’t contractual but are charitable contributions shielded by the First Amendment. Yet, the appellate panel majority opined differently, underscoring that the First Amendment does not authorize any party to bar individuals from a contractual setup based on racial lines.
Source: abcNEWS ByALEXANDRA OLSON AP business writer.