The Fearless Fund Court Case:
What Happened and Where Do We Go from Here?

As part of the community of investors working to advance social — racial, gender, economic, and climate — justice, we at Adasina have intently watched the Fearless Fund court case since its inception in August 2023. The recent legal ruling detailed below is disheartening, and also proof that we must continue our work. We invite you to join us in reaffirming your commitment to social justice, in whatever capacity you can.


Case Background:

On August 2, 2023, American Alliance for Equal Rights (AAER) filed a complaint against Fearless Fund alleging that a grant program run by Fearless Foundation — which awards grants of up to $20,000 to Black women-owned small businesses — violates 42 U.S.C. Section 1981, a federal statute enacted as part of the Civil Rights Act of 1866 that prohibits discrimination on the basis of race in the making or enforcement of contracts. Although the statute was intended to provide legal protections for Black people who were facing widespread discrimination in the wake of emancipation, it has since been interpreted by the courts as protecting people of all races from discrimination in contract formation or enforcement. (Read More: Case Timeline by the Council of Foundations)


The Latest Ruling:

On June 3, 2024, the U.S. Court of Appeals ruled against the Fearless Fund in a 2-1 ruling. Two distinctions about this ruling are especially important to note:

  • In the panel of three judges, the two judges responsible for the decision to restrict grants to Black women business owners were appointed by Donald Trump.
  • This decision does not mention investing. It is narrowly applied to grantmaking and the use of race in making contracts.

The Fearless Fund’s legal team has rightly stated that Monday’s ruling contradicts more than 150 years of civil rights law, and the Lawyers’ Committee for Civil Rights Under Law said, “This fight is far from over.”


Adasina’s Response:

This ruling is bad news for all of us: for justice and sustainability investors, for American businesses and communities, and for all Americans. It is also intellectually dishonest for the court to say that businesses led predominately by white men are irreparably harmed by giving Black women — who receive less than 1% of VC money — equitable access to funding.

However, this ruling is not surprising. And it does not stop our work. In fact, it makes the work more critical than ever.

This decision underscores the very reason why those of us within the DEI, ESG, and impact investing communities must come together now, in a unified and coordinated effort, to ensure that our essential rights as investors are no longer vulnerable to attacks by a reactionary fringe of political actors.

Even as our community comes together to oppose these assaults, we also celebrate our wins. Just last week, a similar case brought against Hello Alice — the fintech platform connecting 1.5 million small businesses to capital and resources — was dismissed based on a decision that no irreparable harm was being done by attempting to cultivate an equitable and diverse small business ecosystem.

The struggle for freedom isn’t over, and it isn’t lost. But it is intensifying, as a tiny minority increasingly attempts to exert control over the majority.

We remain fearless. We are the majority. And there is power in numbers.

Adasina’s stance is unchanged. We continue investing and mobilizing to advance social justice in financial markets, in our role as a public equities impact asset manager.

We also continue working to expand and deepen a community of solidarity, in our role as a partner and founding member of the Freedom Economy, a membership organization created to legally support and affirm the rights of justice and sustainability investors. Now accepting applications from DEI, ESG, and impact investors, the Freedom Economy provides the resources, information, and professional legal network necessary to help investors boldly move forward.


What Can YOU Do?

Adasina Investors:

  1. Stay Invested.
    Your current investments are not impacted. Adasina portfolios were the first to use the Adasina Racial Justice Investor Dataset, so we’ve already taken care of this for you. Companies that violate any of our Social Justice Investment Criteria have always been excluded from our products. As an Adasina investor, you are also part of our strategic investor campaigns.
  2. Apply to Become a Member of the Freedom Economy.
    The Freedom Economy is accepting applications from asset managers, asset allocators (including advisors and consultants), asset owners (foundations, endowments, nonprofits, and aligned individuals), and service providers (providing data/support for investor activism). To apply, complete the application at Details including member benefits are included on the Freedom Economy website.
  3. Refer a Trusted Contact.
    If a colleague or someone in your professional network could benefit from becoming a Freedom Economy member, please have them visit and list your name as the “Referral.”
  4. Make Your Investment Values Official.
    Review and consider updating your investment strategy. If you haven’t already done so, you can still name impact objectives — including racial justice and equity goals — in your investment policy statement (IPS).


While this is a horrendous ruling, grantmakers still have alternatives to maintain race-conscious grantmaking — namely, by converting to a no-strings-attached, gifting paradigm, which may be protected by the First Amendment. (Read more: Navigating Racial Equity Investment Strategies for a Post-Affirmative Action Economy)

Supporters & Community Members:

Support Adasina’s social justice advocacy work via a tax-deductible gift to the Adasina Foundation. For more information, email If you feel inclined to support the work of the Freedom Economy, please reach out directly to


Take bold action. Speak up, invest, and donate to advance justice and equity for all.

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