Fearless Fund Defends Grant Program for Black Women in Face of Legal Challenge
Fearless Fund, an Atlanta-based venture capital firm committed to investing in women of color, is seeking the support of the 11th Circuit Court of Appeals to uphold a September ruling that permits its nonprofit foundation to continue managing a grant program under dispute. The American Alliance for Equal Rights, a conservative group, initiated legal proceedings against Fearless Fund, alleging racial discrimination in its Fearless Strivers Grant Contest.
In the recently filed brief, Fearless Fund contends that the plaintiff, the American Alliance for Equal Rights, seeks to manipulate a crucial civil rights law from the Reconstruction era to impose a “colorblind-at-all-costs viewpoint.” The brief argues that insisting on race-neutral criteria would undermine the foundation’s ability to address the economic challenges faced by Black women, emphasizing the Foundation’s message on this specific topic.
The Fearless Strivers Grant Contest was established to counter the historical underfunding of Black women entrepreneurs, who historically receive a fraction of the funding compared to other founders. Digitalundivided, a nonprofit advocacy group, reported that between 2009 and 2017, a mere 0.0006% of venture funding supported businesses founded by Black women. In 2021, Black female founders secured only 0.05% of U.S. venture capital funding, as reported by Techcrunch.
The American Alliance for Equal Rights, founded by Edward Blum, a prominent activist in the challenge against affirmative action, alleges that Fearless Fund violates the Civil Rights Act of 1866 by offering grants exclusively to Black women. Fearless counters this claim by asserting that the grant program constitutes a charitable donation protected by the First Amendment, not a discriminatory contract.
U.S. District Court Judge Thomas Thrash previously supported Fearless Fund’s argument in a hearing in late September, denying the Alliance’s motion for a preliminary injunction. Despite the dissenting judge’s view that the program is a “perversion of Congressional intent,” the Alliance appealed, leading to a temporary injunction by a three-judge panel from the 11th Circuit.
Fearless Fund rebuffed the Alliance’s recent arguments, asserting that the Alliance fundamentally opposes race-conscious remedial programs and exists solely to challenge them legally. The ongoing legal battle revolves around issues of standing, the applicability of the Reconstruction-era law, and the constitutional protection of Fearless Fund’s expressive message emphasizing the significance of Black women-owned businesses in the economy.