Council on Foundations and Independent Sector Argue First Amendment Right to Discriminate
Ever since Students for Fair Admissions, many nonprofits have fretted about the future of philanthropic funding for racial justice. And one nonprofit law firm, the American Alliance for Equal Rights, has made stamping out racial discrimination its raison d’etre. Well alright, then. More on that later. But first, there is an interesting new, if not very preliminary study out regarding the distribution of philanthropic capital for racial justice. The study covers a four year period before and after Students for Fair Admissions and concludes that most of the funding is concentrated in California and New York:
Philanthropic capital can help communities across the nation to achieve more racially equitable outcomes. But for that to happen, funding should be targeted to meet the needs and realities of the communities it seeks to help. We wanted to better understand the degree to which philanthropic funding earmarked for racial equity flows to areas where it is needed most. To that end, we built on existing research to map the level of US philanthropic giving targeted for racial equity relative to the level of economic insecurity and racial income disparities. The analysis—while limited and by no means comprehensive (see sidebar “Data limitations of our research”)—attempts to shed light on the geospatial distribution of more than 165,000 grants from 2019 to the first quarter of 2023 (see sidebar “Methodology: ‘What-if’ scenario data analysis”).
If American Alliance for Equal Rights gets its way, the decreasing amounts even on the coasts will dry up too. They are suing everybody and his mama for even thinking the words “diversity, equity, and inclusion.” I am such a nonprofit tax freak, to be honest, that I can only admire American Alliance for its fierce civil society participation. I hate their cause, but they are living up to what civil society is about, I’ll tell you that. I am really getting off on how well that outfit is operating right now. Transparent, passionate, vocal, no signs of private inurement or political activity. Sinister and on the wrong side of history, maybe, but they are doing this thang right. They are sort of my Dallas Cowboys of civil society. I hate their stinking guts but they look good and play well.
We blogged about them some time ago. “The American Alliance for Equal Rights, the descendants and members of which have been virtually silent about unequal rights for 400 years, is suing the Fearless Fund Foundation, Inc. That exempt economic development organization provides financial assistance exclusively to Black women entrepreneurs. Sort of like microfinance. And now the nouveau abolitionists are complaining about discrimination, even citing Bob Jones with sudden and belated approval.”
I hate ’em, but I love their adept civil society tactics. On the other hand, I love Council on Foundations and the Independent Sector but right now I think I hate their strategy. Those organizations filed a joint amicus brief in support of Fearless Fund. Ok, I love that. They argue rather explicitly what I thought Bob Jones rejected. That the First Amendment allows Fearless Fund to limit its funding to a single race and gender, because funding is “expressive activity.” I don’t feel too much affection for that argument. I kinda hate it because it has no limits and will burn us all sooner or later. Better to just argue that Students for Fair Admission does not extend to targeted economic development or something. Don’t concede discrimination, implicitly or explicitly, then say you have a First Amendment right to discriminate. Tell ’em you are not discriminating in the first place! That is the truth of the matter and what 15 other organizations, including NAACP Legal Defense Fund, ACLU and the Lawyers’ Committee, are arguing in their own amicus briefs. Instead, the Council and Independent Sector are flying way too close to the sun for my skin. Or is it just me being paranoid? Judge for yourself. Here is the summary of the argument:
SUMMARY OF ARGUMENT
Foundations and nonprofits have a First Amendment right to express their missions through charitable grants. Amici urge the Court to protect that constitutional right by affirming the District Court’s decision rejecting Appellant’s motion to enjoin Fearless Foundation’s expressive conduct. Like most of Amici’s members, Fearless Foundation (the “Foundation”) is a 501(c)(3) nonprofit organization. It qualifies as a 501(c)(3) because it is organized and operates exclusively for charitable purposes, and no part of its net earnings benefit any private individual. See 26 U.S.C.A. § 501(c)(3). The Foundation’s charitable mission is to help eliminate the significant gap in funding that persists for women entrepreneurs of color in the United States. It pursues its mission, in part, by giving grants, tools, and mentorship to certain Black women business owners through its Fearless Strivers Grant contest (the “Grant Program”).
Appellant argues that the Foundation’s Grant Program violates Section 1981 of the Civil Rights Act. Section 1981 is a law that was enacted after the Civil War to guarantee recently emancipated slaves the same rights to make and enforce contracts “as enjoyed by white citizens.” 42 U.S.C. § 1981. More than 150 years later, Black female entrepreneurs still do not enjoy the same opportunities as white entrepreneurs. The Foundation created its Grant Program to help close that gap. Now, Appellant asks the Court to enforce Section 1981 to either stop the Foundation from making grants to Black female entrepreneurs or force it to make grants to other groups it does not wish to support. Either remedy would violate the First Amendment.
This Court has already held that the First Amendment protects a foundation’s right to express its mission through grantmaking. A foundation’s decision to give–or not give–to a particular group conveys a message. Any effort to restrict a grant decision is therefore presumptively unconstitutional, and, at a minimum, must be narrowly tailored to serve a compelling state interest. The relief Appellant seeks flunks that test. Neither forcing the Foundation to make grants to white entrepreneurs nor prohibiting the Foundation from making grants to underfunded Black female entrepreneurs would serve any compelling governmental interest. To the contrary, it would shut down private philanthropy that seeks to alleviate the very problem Section 1981 was enacted to prevent, and it would chill charitable organizations’ long-recognized freedom to choose who benefits from their generosity.
darryll k. jones