Commentary: Appalachia’s Stake in the Fearless Fund Ruling
On June 3rd, the U.S. Court of Appeals issued a ruling to suspend the Strivers Grant in totality, a program run by the Atlanta-based venture capital firm, Fearless Fund. The Fearless Fund champions economic equality and freedom, and provides seed funding and level-A financing to businesses owned and operated by women of color.
When a case was first brought against them last year, Appalachia Funders Network (AFN) signed on to an amicus brief in support of the organization. The court's ruling, finding the Strivers Grant unconstitutional and discriminatory has had significant implications for the Fearless Fund's mission, as it focused on providing financial support exclusively to Black women entrepreneurs. For Appalachia, a region with a diverse socio-economic landscape and significant economic challenges, this ruling could likewise have major ramifications.
For background, the ruling was based on Section 1981 of the 1866 Civil Rights Act, which prohibits racial discrimination in contracts. While the Fearless Fund argued that their grants were charitable donations, not contracts, the court disagreed. The court's decision emphasized that offering grants based on racial criteria constitutes discrimination, even if the intention is to support marginalized groups.
This considered, the decision raises critical questions about the future of philanthropy and efforts to create equitable opportunities for marginalized and underrepresented groups. While the Fearless Fund was explicitly created to support Black women majority-owned businesses (a group 3 times less likely to receive funding despite being the fastest growing group of entrepreneurs, and creating more jobs comparatively with the smaller amount of financing they do receive), the ruling sets a precedent that could affect how grants and funding programs are structured nationwide, including in Appalachia. For AFN, many member group funds prioritize support for low-income communities, often including communities of color. Although central Appalachia is predominantly white, it is far from homogenous, and the region's economic struggles and historical underfunding highlight the intersection of race and class.
To that end, Appalachians, as regionally marginalized, have historically faced significant discrimination and economic challenges. The fight for equitable funding and support on trial in this case is not singularly about race, but also about addressing systemic inequalities that affect economically disadvantaged communities, the two being inextricably intertwined. The ruling could challenge the principles of having a civil society free to move capital to groups as it strategically sees fit, further impeding funding practices that we know produce positive outcomes. We know based upon empirical data that benefits to this type of funding include increases in the amount of civic engagement taking place in communities, as well as improved health outcomes. Research in both black and Appalachian communities also highlights the cyclical nature of disparity in communities with low investment and where risk is seen as high.
This ruling underscores the importance of continuing to advocate for fair treatment and support for all marginalized groups. By acknowledging the unique struggles faced by the people of Appalachia, we can unite in the broader fight for equity and justice, ensuring that all communities have the opportunity to thrive.
As we move forward, it is crucial to recognize that Appalachia's fight is interconnected with the broader struggle for access to capital. This ruling serves as a reminder that the battle against discrimination in all its forms is far from over. Whether it's racial discrimination in urban centers or socio-economic disparities in rural Appalachia, by standing together, we ensure that all our communities and the work within them have the opportunity to prosper.
The Appalachia Funders Network works to accelerate an equitable Appalachian transition by convening and connecting funders for learning, analysis, and collaboration.
Jess Mullins Fullen, Programs and Learning Administrator with Appalachia Funders Network (AFN), is a lifelong Appalachian. She was born and raised in Southeast Kentucky and now resides over the mountain in Southwestern Virginia.
AFN is a network of over 70 grantmaking organizations accelerating an equitable transition in Appalachia. By uniting funders for dynamic learning, insightful analysis, and powerful collaboration, they are committed to increasing and keeping funding in the region to ensure vital resources reach where they're needed most.
This article first appeared on The Daily Yonder and is republished here under a Creative Commons license.