A landmark case has nonprofit leaders in Michigan and across the country on edge, as an Atlanta-based charity, the Fearless Foundation, and its Fearless Fund have been barred from offering grants and support exclusively to Black women. This restriction arises from a national contest aimed at empowering Black female entrepreneurs. This case, which touches the core of philanthropic freedom and racial equity, could set a dangerous precedent for similar initiatives nationwide.
Last week, a federal appeals court upheld an injunction against the Fearless Fund, marking a significant moment in the ongoing legal battle. Although the case has yet to be fully resolved, the court’s decision to maintain the injunction has sent shockwaves through the philanthropic community. Many nonprofit leaders expressed deep concern, noting that this ruling is sending a chilling effect to philanthropy that could lead to other similar cases.
The injunction stems from a lawsuit filed in August by the American Alliance for Equal Rights and its founder, Edward Blum, who is no stranger to high-stakes legal battles. Blum is the architect behind the U.S. Supreme Court case that dismantled affirmative action in college admissions last year. In this new lawsuit, the alliance claims that the Fearless Fund’s grant program violates the Civil Rights Act of 1866, which prohibits race-based discrimination in contracts.
The U.S. Court of Appeals for the 11th Judicial Circuit in Miami ruled that the agreement between the Fearless Foundation and the winners of the Fearless Strivers Grant Contest likely violates the Civil War-era law and is unlikely to receive First Amendment protection. This contest awards $20,000, mentorship, and digital tools to four businesses owned by Black women. Contestants were required to acknowledge that by entering, they agreed to the contest’s official rules, which constituted a contract. After the lawsuit was filed, the foundation made changes to the rules but maintained some conditions that the court found problematic.
Nonprofit leaders emphasize the broader implications of this ruling, explaining that the alliance’s attorneys are using the 1866 Civil Rights Act, which was designed to ensure that discrimination based on race wasn’t impacting former slaves, to essentially say that race-based discrimination is not allowed.
The crux of the concern among nonprofit leaders is that this case could infringe on the First Amendment rights of philanthropic organizations to allocate resources based on their values. They articulated this fear, stating that what is concerning is that this ruling infringes on the First Amendment rights of philanthropy to express their resources based on their values.
Furthermore, many foundations focus their resources on addressing systemic inequities rooted in racial discrimination. This case, if upheld, could undermine these critical efforts. The Council of Michigan Foundations, along with roughly a dozen Michigan foundations and nonprofit groups, joined an amicus brief filed by the Washington, D.C.-based Council on Foundations and Independent Sector. They are advocating for a ruling in favor of the Fearless Foundation.
Detroit, known as the Blackest city in America, stands as a vibrant testament to Black culture, resilience, and innovation. The city’s rich history and dynamic community have long been fueled by the entrepreneurial spirit of Black residents. However, the recent legal challenges faced by the Fearless Foundation could cast a long shadow over this thriving landscape. If the precedent set by this case holds, it could severely restrict the opportunities for Black women entrepreneurs in Detroit, who already face systemic barriers in accessing funding and resources. This legal battle threatens to undermine decades of progress and the hard-won achievements of Black entrepreneurs in the city.
The implications of this case are particularly dire for Black women in Detroit, who have been at the forefront of community revitalization and economic development. By denying targeted support to Black female entrepreneurs, this ruling risks perpetuating cycles of inequity and economic disenfranchisement. In a city where Black women are pillars of innovation and leadership, the chilling effect of this legal precedent could stifle growth and deter future generations from pursuing entrepreneurial dreams. The fight for racial equity in philanthropy is not just a legal issue; it is a matter of preserving the economic vitality and cultural richness of Detroit. The stakes are high, and the outcome of this case could reverberate through the city for years to come, making it harder for Black women entrepreneurs to thrive.
The Detroit-based Skillman Foundation is among the Michigan foundations supporting the brief. Angelique Power, its President and CEO, emphasized the importance of racial equity in philanthropy. In a statement, Power wrote, “Every philanthropic entity has the right to invest social impact dollars the way they deem important, especially when so much evidence underscores the need to implement racial equity as an invaluable engine toward a more just and prosperous society.”
Power’s statement resonates deeply with the community-focused mission of the Skillman Foundation, which is dedicated to improving public schools in Detroit, a city where the majority of students are Black and Brown. She stressed that a racialized lens is not just important but necessary to deepen the foundation’s impact. “Ed Blum, the conservative activist, attempting to dictate how anyone in America chooses to invest their dollars will not only set back progress in a racially diverse republic, but he will also hamstring any donor anywhere,” she added.
As this case progresses, the stakes are high for philanthropic organizations committed to racial equity. The outcome could either reaffirm the right of foundations to address systemic racism through targeted support or set a precedent that hinders such efforts. Nonprofit leaders and activists must remain vigilant and vocal in defending the principles of equity and justice that underpin their work.
In a society grappling with the remnants of systemic racism, the Fearless Fund’s mission to support Black female entrepreneurs is not just a contest but a crucial step towards leveling the playing field. As this case unfolds, the broader philanthropic community must stand united in asserting their right to direct their resources where they see the most need and potential for transformative change. The fight for racial equity in philanthropy is far from over, and the outcome of this case will have lasting implications for the future of charitable giving in America.
The Fearless Foundation’s efforts to uplift Black women entrepreneurs are a testament to the enduring need for focused, equitable support in a landscape that has long marginalized these communities. The philanthropic sector’s ability to act on its values and mission is under scrutiny, and the implications of this case will reverberate far beyond the courtroom.
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