A diversity, equity, and inclusion (DEI) group supported by Rev. Al Sharpton has officially shut down its race-specific grant program following a legal dispute with a conservative group. The Fearless Fund, a venture capital firm that provided $20,000 grants to Black women entrepreneurs, made the announcement in September 2024. The decision came after the American Alliance for Equal Rights (AAER) led a lawsuit challenging the legality of the program under the Civil Rights Act of 1866.
The lawsuit, initiated by Edward Blum, who is known for his role in dismantling affirmative action in education, argued that the Fearless Fund’s grants violated federal law by excluding applicants based on race. The AAER emphasized that such programs should be open to all, regardless of race, as outlined by civil rights protections. Blum stated that programs like the one offered by Fearless Fund were "divisive and illegal" and praised the shutdown as a win for equality.
DEI is CANCELED: A diversity, equity, and inclusion activist group ended its race-based grant program—which awarded $20,000 in grants to black female-owned businesses—after settling a legal battle with the American Alliance for Equal Rights.https://t.co/eUmJiFpuf3
— Blake Mauro (@Blakechiara1) September 12, 2024
The legal challenge reached a pivotal moment in June 2024, when a U.S. federal appeals court ruled against the Fearless Fund, temporarily prohibiting them from awarding the grants. The court found that the program was "substantially likely" to violate Section 1981 of the Civil Rights Act. The firm chose to settle rather than pursue the case further, likely out of concern that a Supreme Court ruling could set a precedent against corporate DEI initiatives. This move is seen as a significant setback for DEI programs, which have faced growing scrutiny in the wake of recent Supreme Court decisions.
Rev. Al Sharpton, who backed the Fearless Fund throughout the legal fight, called the decision to shutter the program a painful but necessary sacrifice. He argued that continuing the legal battle risked a broader loss in the Supreme Court, which could have had far-reaching consequences for race-based initiatives across the corporate and philanthropic sectors. Sharpton described the situation as one where the program had to be "sacrificed to save the larger cause" of DEI efforts.
Sharpton-Backed DEI Group Shutters Race-Based Grant Program Following Legal Fight: A diversity, equity, and inclusion activist group backed by anti-Semite Rev. Al Sharpton ended its race-based grant program after settling a legal battle… https://t.co/dVbnt3CKpZ #BreakingNews pic.twitter.com/PF6Ugy0pWA
— ZBreakingNewz (@ZBreakingNewz) September 11, 2024
The closure of the Fearless Fund’s grant program comes amid a broader pushback against DEI initiatives across the country. Following the Supreme Court’s landmark decision against affirmative action in college admissions earlier in 2024, DEI efforts in the private sector have increasingly come under fire.
Major companies such as Amazon, Meta, and Pfizer have also faced legal challenges over race-based programs, leading many to scale back or eliminate such initiatives entirely.
Critics of race-based DEI programs, like the AAER, argue that these efforts promote division and unfairly discriminate against non-minority groups. Supporters, however, maintain that such programs are crucial for addressing systemic inequalities and providing opportunities to historically marginalized communities. Despite this latest legal victory for anti-DEI activists, the fight over such programs is likely to continue as companies and organizations grapple with how to promote diversity without running afoul of civil rights laws.
The Fearless Fund's shutdown marks a turning point in the ongoing legal and cultural battles over affirmative action and DEI in America. As companies face increasing legal challenges, many are reevaluating the structure of their DEI programs to ensure they align with federal law while still striving for inclusivity.
