Various news outlets are reporting that American Alliance for Equal Rights v. Fearless Fund Management, LLC settled today.
American Alliance for Equal Rights issued a press release announcing the settlement, and Fearless Fund CEO Arian Simone spoke about the settlement to AfroTech.
Civil rights attorney Ben Crump, who was part of Fearless Fund’s legal team, issued a statement explaining that by “strategically avoiding a Supreme Court ruling that could have eliminated race-based funding, we protected vital opportunities for the entire Black and brown community. This victory ensures that programs dedicated to uplifting underrepresented entrepreneurs remain intact and continue to serve their critical purpose.”
Our previous client alert on the topic describes the history of the case. In June 2024, the U.S. Court of Appeals for the Eleventh Circuit issued a decision upholding a preliminary injunction preventing Fearless Foundation, Inc. (Fearless Fund’s charitable arm) from offering its Strivers Grant funding contest, which was open only to businesses majority-owned by Black women. The court concluded that the contest likely violated Section 1981 of the Civil Rights Act of 1866. The 11th Circuit decision is limited to charitable funding contests that exclude applicants based on race. The decision does not address race-conscious venture investments. Race-conscious grant contests are not illegal outside of the 11th Circuit (which covers Alabama, Florida, and Georgia), though charities and other investors may choose to assess their programs to determine how to effectively pursue their race-equity missions while minimizing their litigation risk.
Lowenstein attorneys continue to counsel nonprofit and other clients on navigating this evolving area of law. Please contact a member of your Lowenstein team if you would like to discuss risk mitigation strategies.
