Originally printed in Inside Philanthropy, October 9, 2024
The 2-1 decision by a federal appeals court panel in American Alliance for Equal Rights v. Fearless Fund earlier this year raised legal questions about how philanthropies can address pressing issues of racial inequity and provide grants to Black women entrepreneurs. The subsequent dismissal and out-of-court settlement of the case, announced on September 11, still leaves much unanswered and many opportunities left to explore.
I am not a lawyer and cannot begin to address the legal intricacies, which already include such esoteric issues as whether a grant is a form of free speech or a contract. But the need to act is still a clear imperative as, subsequent to the settlement, the Fearless Fund announced a new, multimillion-dollar loan program for “under-resourced entrepreneurs” within its mission “to bridge the gap in venture capital funding for women-of-color founders building scalable, growth-aggressive companies.”
What I do know from decades spent working with cities on downtown revitalization, including many that are majority Black or Hispanic, is that the racial inequity that philanthropies seek to address is widespread and profound. And instead of jeopardizing future funding programs, the settlement is designed to allow the Fearless Fund and philanthropy to continue to address racial inequity and recognize that day-to-day small business reality is filled with bias.