Tag Archives: grants

Are Remedies Discriminatory?

If I started a nonprofit that provided wheelchairs only to crippled people, would I be discriminating against people who aren’t “mobility-challenged”? 

If I established a mentoring organization to assist kids who were failing math, would I be discriminating against kids who were doing well in math?

What if I started a foundation focused on–and limited to– helping Black women entrepreneurs? Would that amount to discrimination against Whites and men?

The courts are about to answer that last question.

Each of the efforts I’ve described center on helping a population that demonstrably needs a helping hand: people who cannot walk unaided, kids who struggle with math, Black businesswomen disadvantaged by years of discrimination. 

It turns out that the White Wing–aka the Right Wing–strongly objects to efforts to ameliorate that latter disadvantage, seeing such remedial efforts as discrimination against White folks. And our reactionary Supreme Court may well agree with them.

They might be courtroom adversaries, but Arian Simone swears she and the man suing her venture capital firm want the same thing: an America where race does not matter.

The difference is that Simone believes race-specific initiatives like the Fearless Fund are essential to achieving that ideal. Given that Black-owned start-ups secured less than 1 percent of the nation’s VC spending last year, she said, “I can’t stop.”

But the conservative activist driving the lawsuit, Edward Blum, says racial equity is not one-sided. That’s why he insists that the fund’s grant program for Black women is discriminatory, in one of the most-watched civil rights cases since he was on the winning side of the landmark Supreme Court decision that overturned race-conscious college admissions.

In the coming months, a panel on the U.S. Court of Appeals for the 11th Circuit in Florida will decide whether to block the Atlanta-based Fearless Fund from awarding $20,000 grants to Black female-owned businesses while the case is litigated in trial court. The stakes could not be higher, as evidenced by the legal firepower lining up on both sides and the swarm of amicus briefs, illustrating the vastly different interpretations of the nature of discrimination, the role of history in shaping public policy and how civil rights should work in America.

Four years of Donald Trump’s Court appointments have distorted more than just the Supreme Court; two of the three judges on the 11th Circuit panel are Trump appointees, and according to the linked report, have appeared skeptical of the Fund’s argument that its targeted giving is “charitable giving” protected by the First Amendment.

Should Blum’s American Alliance for Equal Rights prevail, the case could have sweeping implications for any race-based initiative in the private sector, particularly grant programs, scholarships and other efforts with monetary benefits, according to observers on both sides of the issue. In less than a year, Blum’s legal nonprofit organization has reached settlements in about a half-dozen cases involving scholarships and fellowships at large law firms, as well as a Texas-based grant program for minority and women entrepreneurs. All agreed to drop racial criteria to resolve the discrimination claims.

The attorney who filed an amicus brief on behalf of the Lawyers’ Committee for Civil Rights Under Law and the NAACP Legal Defense Fund has accused the plaintiffs of “taking the Civil Rights Act of 1866 and trying to turn it on its head, so that it becomes weaponized and undermines efforts to do exactly what the Civil Rights Act was intended to do, which was be remedial and race-conscious.”

The lawsuit is an attack on efforts at remediation. Fearless Fund was established to address what it called “the chasm in venture capital for start-ups run by women of color.”  In 2018, the year the Fund was established, businesses headed by Black women received exactly 1 percent of the $131 billion invested that year. Conservatives argue that targeting investments in an effort to level the playing field is anti-business and–horrors!– meant to promote a “liberal agenda.” The lawsuit is part and parcel of the broader backlash against DEI efforts in higher education and the business world. Civil Rights organizations respond that the Fund’s grant program is a form of charitable giving —  much like organizations that support people of a certain heritage, such as the Sons and Daughters of Italy in America.

As one commentator has written, the case should trouble people who value the independence of American philanthropic institutions– even opponents of affirmative action and DEI. Fearless Fund grants are awarded by a 501(c)(3) nonprofit foundation that should have the right to target its grant program as it chooses.

 Conservatives used to advocate for limits on government intrusion into private behaviors. I guess that was only so long as those private behaviors benefitted White men. 

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Don’t Help Those People!!

When do efforts to ameliorate past disadvantage turn into unconstitutional discrimination?

It’s a fair enough question; if demographic change gives people of color the power to make the nation’s laws, and they use that power to privilege themselves and disadvantage Whites, that would clearly be wrong. While accusations of “reverse discrimination” tend to be prompted more by racism than actual unfairness, there have been some cases where courts have found such reverse discrimination. 

But let’s get real! Efforts to help people overcome longstanding structural disadvantage aren’t plots against Whites. The current attacks on “woke” corporate efforts to ensure fairness are more often than not barely-veiled efforts to maintain previous, racist barriers.

I was particularly struck by a recent report in the Washington Post.

The article began by recounting an entrepreneurial  bright idea. Patterning her project after those ubiquitous food trucks, a young Black woman in Atlanta bought an old school bus, painted it white, tore out the floor and seats, and added manicure stations. The effort took off, and she was booking weddings and parties.

Looking to scale up, she approached a grant program for Black, female entrepreneurs run by Fearless Fund, an Atlanta-based venture capital firm.

The firm had planned to name the latest round of grant winners before Labor Day. But Fearless Fund has agreed to delay the awards as it finds itself ensnared in the nation’s rapidly expanding legal brawl over affirmative action.

Edward Blum, whose lawsuit prompted the U.S. Supreme Court to strike down the use of racial preferences in college admissions, targeted the Fearless Fund in early August, claiming it engaged in “explicit racial exclusion” by operating a grant program “open only to Black females.” The lawsuit — which asked the court to prevent the fund from selecting its next round of grant winners — is one of the most prominent in a flurry of recent lawsuits and legal claims by conservative activists aimed at applying the Supreme Court’s insistence on race-blind college admissions practices to the corporate sphere of hiring, contracting and investment.

Blum has also sued two law firms over their operation of fellowship programs aimed at students of color, LGBTQ+ students, and students with disabilities, alleging that the exclusion of applicants who don’t fall into those categories is discriminatory, and demanding that the programs be shut down.

It will not surprise you to learn that a Google search to find cases in which Blum challenged programs that preferred White folks was unsuccessful….

Fearless Fund is one of several entities trying to help minority entrepreneurs who have encountered race-based barriers to capital:

Fearless Fund is one of dozens of firms geared toward combating the well-documented racial imbalance in U.S. venture capital: Last year, 1.1 percent of the $214 billion in venture capital funding allocated went to companies with Black founders, according to data from Crunchbase. In 2019, research from Stanford University concluded that founders of color face more bias from professional investors the better they perform.

The women who established Fearless Fund had been personally affected by the wildly disproportionate funding available to Black and White enterprises, and wanted to help other Black women facing the barriers that they’d struggled to overcome. They’ve lined up a heavyweight defense team, including the NAACP Legal Defense Fund, Gibson, Dunn & Crutcher and Ben Crump.

The lawsuit against the Fearless Fund, Crump told The Post, “is an attack by the enemies of equality, to say ‘You will never be equal.’”…

The lawsuit claims that the venture capital firm’s practice of awarding $20,000 grants, business support services and mentorship to Black women-owned businesses violates a section of the Civil Rights Act of 1866 that guarantees “race neutrality” in contracts. That legislation, which was passed after the Civil War to protect the rights of people freed from enslavement, is also being used in similar lawsuits — along with the Civil Rights Act of 1964 — to claim that companies’ attempts to eradicate racial inequality qualify as discrimination.

Unsurprisingly, Blum and his fellow champions of racial neutrality were nowhere to be found–in the courts or in the court of public opinion–when corporate practices blatantly favored Whites, making their current pious pronouncements about favoritism and discrimination ring especially hollow.

Federal laws that were intended to ensure equal opportunity and rights for people of color “are now being used as a weapon to deny them rights,” said Kenneth Davis, professor of law and ethics at Fordham University. “It’s the height of irony.”

That irony is proliferating. In the wake of the Supreme Court decision striking down college affirmative action programs, a federal judge has ruled that an SBA program for historically-disadvantaged groups is unconstitutional.

Maybe next they can attack scholarships for poor students on the grounds that they discriminate against the rich….

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