Fed court stalls grant program for female Black entrepreneurs

In a pivotal case highlighting the intensifying debate surrounding corporate diversity initiatives, a federal appeals court in Atlanta has temporarily halted the Fearless Fund’s Strivers Grant Contest. The grant program, which awards $20,000 to businesses predominantly owned by Black women, is now at the center of a legal dispute.

Violation of the grant program

The 2-1 decision by the 11th U.S. Circuit Court of Appeals came in response to a lawsuit brought forth by the American Alliance for Equal Rights, led by conservative activist Edward Blum. Blum contends that the Fearless Fund’s initiative violates a section of the Civil Rights Act of 1866, which prohibits racial discrimination in contracts.

The order, issued on a recent Saturday, reversed a prior ruling by U.S. District Judge Thomas W. Thrash, who had denied the American Alliance’s request to halt the program. The majority on the appeals court panel argued that the Strivers Grant Contest was “racially exclusionary” and that Blum’s group had a strong chance of prevailing.

Fearless Fund: No fear

In response to the decision, the Fearless Fund expressed its disagreement, stating, “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.”

This case has become a pivotal test in the ongoing debate over racial considerations, particularly as it pertains to workplace diversity, following the U.S. Supreme Court’s June ruling to end affirmative action in college admissions.

The Strivers Grant Contest is just one of several programs administered by the Fearless Fund, established with the aim of bridging the funding gap for Black female entrepreneurs who currently receive less than 1% of venture capital funding. To qualify for these grants, businesses must have majority ownership by Black women, among other criteria.

The Fearless Fund has enlisted prominent civil rights attorneys, including Ben Crump, to defend against the lawsuit. These lawyers argue that the grants are not contracts but rather donations protected by the First Amendment, adding another layer of complexity to this high-profile case.

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