DEI Setback: Court Blocks Fearless Fund Grants To Black Women

The court's decision is definitely a blow to Black women.

On June 3, the 11th Circuit U.S. Court of Appeals temporarily halted the Fearless Fund, a grant program for women, from giving $20,000 grants exclusively to Black women-owned businesses while a lawsuit is ongoing.

“This is devastating for the Fearless Fund and Foundation and for the women we have invested in,” Arian Simone, CEO and founding partner of Fearless Fund, told USA Today. “I am shattered for every girl of color who has a dream but will grow up in a nation determined not to give her a shot to live it. On their behalf, we will turn the pain into purpose and fight with all our might.”

Despite the ruling, Simone confirmed that the Fearless Fund remained “open for business.”

“The message these judges sent today is that diversity in Corporate America, education, or anywhere else should not exist,” Simone added. “If this were truly about exercising free speech with your dollars—an American tradition as old as this nation itself—the results would have been different. Instead, these judges bought what a small group of white men sold. They countered the rulings of other courts sued on similar grounds.”

The high court’s decision supported conservative activist Edward Blum’s claim that the grant program might be discriminatory. The ruling overturned a previous decision by a federal judge in September, who had found the lawsuit unlikely to succeed on First Amendment grounds. The decision became a significant setback for the Atlanta-based Fearless Fund, which sought to increase venture capital funding for Black women and could impact similar race-based initiatives in the private sector.

This case is part of a larger trend, with conservative activists like Blum, who, after last year’s landmark ruling against race-conscious college admissions, have now turned their attention to the private 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. “Programs that exclude certain individuals because of their race, such as the ones the Fearless Fund has designed and implemented, are unjust and polarizing.”

Although this decision does not directly apply to employers, it has inspired a wave of legal challenges to DEI programs nationwide, causing uncertainty among business leaders. The Fearless Fund, a relatively small player in the venture capital industry, was founded by Black women to support Black women, who received less than 1% of the $215 billion in venture capital funding last year.

The firm has backed notable companies such as the restaurant chain Slutty Vegan and the beauty brand Live Tinted.

Previously, U.S. District Court Judge Thomas Thrash Jr., appointed by President Bill Clinton, had ruled that the Fearless Fund’s grant program is a form of protected speech under the First Amendment. However, the 11th Circuit panel, which includes two judges appointed by Donald Trump, disagreed.

“Preliminary injunctive relief is appropriate because Fearless’s contest is substantially unlikely to enjoy First Amendment protection and inflicts irreparable injury,” the judges said.

Alphonso David, president and CEO of the Global Black Economic Forum and the attorney representing the Fearless Fund, said “this is the first court decision in the 150-plus year history of the post-Civil War civil rights law that has halted private charitable support for any racial or ethnic group.

“The dissenting judge, the district court, and other courts agree that these claims should not prevail,” he added. “This is not the outcome but a preliminary ruling without a full factual record.”