How The Fearless Fund's 'Reverse Racism' Lawsuit Threatens Film Grants

Recently, venture capital fund “The Fearless Fund” has been taken to court and accused of “reverse racism” by conservative lobbyist Edward Blum. The conservative non-profit owner accused the fund of discrimination despite the group's mission to address the devastating lack of venture funding for Black businesses and even more so, for Black woman-owned businesses. 

The complaint scrutinizes the Fearless Fund x MasterCard Partnership as Blumb alleges that the contest calling for Black women participants to apply for the program is “discriminatory” and illegal. The American Alliance for Equal Rights headed by Blum seems to be taking on diversity and inclusion programming across the country. He also made a landmark undoing of the Affirmative Action measures that have existed for years, accusing Harvard University of denying Asian American Students from Harvard due to their race.

If Blum plans to put diversity on trial in America, what does this mean for diversity filmmaking programming and grants that support filmmakers of color everywhere?

Conservative lobbyist Edward Blum

Despite the group's claims, Black woman founders make up less than 2% of all Venture Capital Funding in the venture capital markets. This grant program is not explicitly a contract that barred anyone from applying based on their race or color. The complaint is interesting nevertheless, as applications weren’t even closed when the initial complaint was made, and from what I can see, no one has come forward saying that they were denied due to discrimination or were awarded the grant based on the alleged “discriminatory measures”. It is unsure if Blum is representing the interest of the general public or of a specific person who has come forward against The Fearless Fund. Well-known Fearless Fund entrepreneurs include successful businesses like Slutty Vegan’s Pinky Cole, who supercharged their business with support from the fund. So the power and impact of this kind of organization are crucial to addressing socio-economic inequalities. 

On the heels of a Roe v Wade appeal and the undoing of Affirmative Action, this lawsuit has raised flags for other impact funds and programs. Designed to address and close the racial wealth gap through enterprise funding and other diversity and inclusion programming.

Black-owned venture capital firm Fearless Fund responds to racial discrimination lawsuit

If Blum's arguments are upheld by federal appeals courts, they could pose a threat to programs and organizations aiming to allocate resources to Black and minority communities. It’s hard to ignore that this seems like one of the core motivations of the American Alliance for Equal Rights non-profit,  based on their track record of pursuing these diversity programs.

Programs like Lena Waithe’s Hillman Grad Program and EICOP have provided minority and underrepresented filmmakers, producers, and directors of photography with opportunities and money to start their careers in Hollywood. Could the numerous grants, fellowships, and contests that have supported minority filmmakers also be at risk of being pursued in federal court?

Hillman Grad Mentorship Lab

It’s too early to tell, but the legal argument framed as “reverse racism” in the public is certainly not new. In Georgia, where the Fearless Fund is headquartered, there have been nominative and punitive damages awarded to white victims of “discrimination” who argue that they were discriminated against despite their lack of “protected class status”. A watershed moment in Atlanta's powerful history of minority inclusion, Atlanta businessman Bill Corey was awarded $17.5 million for an indoor advertising contract for the Hartsfield Jackson International Airport, for this very claim of “reverse discriminatory practices”. 

With this, I was curious to see what legal precedent they are using to argue their position, considering that Edward Blum does not appear to be directly harmed by the grant. or represent anyone who is owed damages by the grant program, if a loser or “injured party”  is identified.

As defined by Georgia Employment Law, a protected class includes persons experiencing discrimination based on “race, sex, age, disability, national origin, color or retaliation”. Historically minority groups, especially African Americans, have made many claims of employment discrimination considering the historical prevalence of discrimination and racism in the United States job market. With this in mind, I went into the complaint to understand what the argument is HERE, considering that this was a grant program. 

At the heart of this case, Blum seems to mention a previous case Domino’s Pizza v. John McDonald (2006) where a man by the name of John McDonald had a contract with Domino’s Pizza that was impaired due to racial discrimination where McDonald filed for bankruptcy after the “contract” was breached. While this suit was settled out of court. This was ultimately a case that highlighted the lack of a contractual relationship between McDonald and Domino's which needed to be established to assign damages, due to discrimination and racial animus. While the case is one of many outlined in Blum's formal complaint, there is a clear conflict between the theoretical “contractor.” who I assume Edwards is alleging to be or represent, and the "grant recipient" who has not yet been identified but is being treated as the person bound to discriminatory contract terms. Again, Blum seems like a mostly disinterested third party to this Fearless Fund's program, so we will have to see if that precedent holds up in court.

As conservative lobbying groups start to undo more and more advocacy programs for underrepresented groups, Blum must prove not only that diversity and inclusion programming like this is an “illegal contract.” He must also prove that he is the proper party (the persons or groups harmed in this case) that has a right to raise a suit and be compensated for this alleged. “damage” being done. 

It’s all very confusing and technical, but in the end, it feels as though hate and opportunism rest at the center of the controversy. Something about this feels reactionary, but sadly this seems like the 74-year-old's lifelong ambition.

Read a summary of the Fearless Fund’s nearly 900-page response here: https://www.forbes.com/sites/morgansimon/2023/09/06/fearless-funds-914-page-response-makes-a-strong-case-that-discrimination-lawsuit-is-baseless/?sh=62781d2f40da