A panel on the 11th Circuit U.S. Court of Appeals, siding with conservative activist Edward Blum, who believes the grant program is likely discriminatory, prohibited Fearless Fund from giving $20,000 grants to black women-owned businesses during a highly watched civil rights dispute.
The appeals court disagreed with a federal judge’s decision in September that the lawsuit was unlikely to succeed on First Amendment grounds.
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“This is heartbreaking for the Fearless Fund and Foundation, as well as the women we’ve invested in. I am heartbroken for every girl of color who has a goal but will grow up in a country determined not to give her a chance to realize it. In a statement to USA TODAY, Arian Simone, CEO and founding partner of Fearless Fund and founder of the Fearless Foundation, said: “On their behalf, we will turn the pain into purpose and fight with all our might.”
Simone stated that the Fearless Fund was “still open for business.”
“These judges’ message today is that there should be no diversity in corporate America, education, or anywhere else. If this was truly about exercising free speech with your dollars, a long-standing American tradition, the outcome would have been different. Rather, these judges bought what a handful of white men were selling. They contested the rulings of other courts that had been sued on similar grounds,” she clarified.
The Fearless Fund case is part of a growing backlash from conservative activists like Blum, who, following last year’s stunning affirmative action triumph over race-conscious college admissions, turned his attention to the business sector.
“Our nation’s civil rights laws do not permit racial distinctions because some groups are overrepresented in various endeavors, while others are underrepresented,” Blum said in a press release. “Programs that exclude certain individuals because of their race, such as the ones the Fearless Fund has designed and implemented, are unjust and polarizing.”
Though it does not technically apply to businesses, conservative activists seized on the decision to strike down affirmative action in higher education, claiming it raises fundamental questions about how corporate America solves workplace inequalities. Since then, the country has witnessed an increase in judicial challenges to DEI programs. The “anti-woke” backlash has unnerved corporate leaders who are navigating changing terrain.
Black women formed the Fearless Fund, a modest player in the venture capital market, to support black women, who received less than 1% of $215 billion in venture capital funding last year. The company has backed new businesses, such as restaurant chain Slutty Vegan and beauty brand Live Tinted.
U.S. District Court Judge Thomas Thrash Jr., appointed by President Bill Clinton, determined that the Fearless Fund’s grant program constitutes protected speech under the First Amendment. The 11th Circuit panel disagreed. Two of the three judges are Trump appointments.
“Preliminary injunctive relief is appropriate because Fearless’s contest is,” the judge stated, “substantially unlikely to enjoy First Amendment protection and inflicts irreparable injury.”
According to a lawyer for the Fearless Fund, the justices used an 1866 law intended to guarantee economic independence to recently freed slaves to prevent the Fearless Foundation from making awards to black women.
“This is the first court ruling in the 150-year history of post-Civil War civil rights legislation to prohibit private philanthropic funding for any racial or ethnic organization. Alphonso David, president and CEO of the Global Black Economic Forum and counsel for the Fearless Fund, concurred with the dissenting judge, the district court, and other courts in rejecting these types of claims. “This is not the final outcome in this case; it is a preliminary ruling without a full factual record.”
