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Federal Appeals Court Blocks Grant Program for Black Women Entrepreneurs

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Federal Appeals Court Blocks Grant Program for Black Women Entrepreneurs

A federal appeals court has temporarily blocked a grant program designed for businesses owned by Black women, marking a significant development in the ongoing battle over corporate diversity policies. The 2-1 decision by the Atlanta-based 11th U.S. Circuit Court of Appeals prevents the Fearless Fund from running the Strivers Grant Contest, which awards $20,000 to businesses that meet certain criteria, including being at least 51% owned by Black women. The case was brought by the American Alliance for Equal Rights, a group led by conservative activist Edward Blum, who argues that the program violates a section of the Civil Rights Act of 1866. While the Fearless Fund expressed disagreement with the decision, they remain confident in ultimately prevailing in the lawsuit. This case has become a test case in the ongoing debate over racial considerations, particularly in the workplace. The grant contest is part of the Fearless Fund's efforts to address the funding gap for Black female entrepreneurs, who receive less than 1% of venture capital funding. The attorneys representing the Fearless Fund argue that the grants are protected by the First Amendment, while the appellate panel disagreed, stating that race-based exclusion from a contractual regime is not protected.

Implications of Blocked Grant Program for New Businesses

The temporary blocking of the Strivers Grant Contest, a program designed to support businesses owned by Black women, has significant implications for new businesses, particularly those owned by Black women. This decision by the 11th U.S. Circuit Court of Appeals highlights the ongoing debate over racial considerations in business and the workplace.

Access to Funding

The Strivers Grant Contest was an initiative to address the stark funding gap faced by Black female entrepreneurs, who receive less than 1% of venture capital funding. With the program now blocked, new businesses owned by Black women may face even greater challenges in securing necessary funding.

Legal Considerations

The case also underscores the importance of understanding and navigating the complex legal landscape surrounding business operations and funding. New businesses must be aware of potential legal hurdles, particularly those related to diversity and inclusion policies.
Future of Diversity Policies
This case serves as a test for the future of diversity policies, potentially influencing how new businesses approach diversity and inclusion. The outcome could either reinforce the importance of such initiatives or create a chilling effect, discouraging businesses from implementing similar programs. Despite the current setback, the Fearless Fund remains confident in their mission and the eventual resolution of the lawsuit.
Story First Published at: https://financialpost.com/pmn/business-pmn/grant-program-for-black-women-entrepreneurs-blocked-by-federal-appeals-court
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