A federal judge in Georgia ruled that Fearless Fund, a venture capital fund for women of color, can continue offering a grant program only to Black women entrepreneurs.
On Tuesday, the judge refused to issue an injunction blocking the program after a lawsuit alleged it engaged in “explicit racial exclusion”.
The Lawsuit Against Fearless Fund
The American Alliance for Equal Rights, founded by Edward Blum, brought a lawsuit against Fearless Fund in August 2023.
It targeted the fund’s Fearless Strives Grant Contest, which awards Black women who own small businesses $20,000 in grants, digital tools to help them grow their businesses and mentorship opportunities.
The lawsuit accused the grant program of violating Section 1081 of the Civil Rights Act of 1866, which bars racial bias in private contracts by opening its grant competition only to Black women.
Previously, lawsuits brought by Blum and the conservative group led to the Supreme Court’s affirmative action ruling.
Fearless Fund’s response
Fearless Fund responded to the lawsuit, stating it saw a significant gap in funding for women-owned businesses, specifically women of color, which is why they created the fund.
They also explained in 2022, venture capital firms deployed $288 billion, with women of color founders only receiving 0.39% of the total funding.
“At a time when efforts to advance equity are under attack, our fund’s mission and our commitment to anti-discrimination principles could not be stronger,” they wrote in their statement.
“We stand firm in our purpose to provide a gateway to economic freedom.”
The Judge Allows The Program To Continue
On Tuesday, US District Judge Thomas W. Thrash rejected the arguments from the American Alliance for Equal Rights group.
He confirmed the Fearless Fund grant program qualifies as charitable giving, a form of protected speech under the First Amendment.
Fearless Fund founders took to Instagram to announce the news, writing, “Today is a victorious day, and we still have more work to do, but today we celebrate.”
Blum told The Washington Post that his group is disappointed with the decision and intends to appeal.
“Our nation’s civil rights laws do not permit racial distinctions because some groups are overrepresented in various endeavours, while others are underrepresented,” he said.
To fight the lawsuit, Fearless Fund had a strong defence team with expertise in civil rights.
This included the NAACP Legal Defense Fund, Gibson Dunn and Crutcher and Ben Crump, the attorney who represented the families of George Floyd and Tyre Nichols in their civil lawsuits.
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