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The basic tenets of diversity, equity, and inclusion are under attack; and those who seek to stifle and even outlaw DEI efforts just won a significant legal victory.

Last week, a US appellate court ruled that the Fearless Fund, an Atlanta-based venture capital firm, should be temporarily blocked from issuing grants earmarked for businesses owned by Black women.

Fearless Fund was sued last year by a group backed by Edward Blum, a conservative opponent of affirmative action—and now DEI—whose lawsuits against Harvard and the University of North Carolina resulted in the Supreme Court’s ruling that ended affirmative action.

“This ruling makes it harder to support historically marginalized groups.”

The lawsuit against Fearless Fund is one of several cases making their way through the courts that seek to challenge the ability of the private sector, including nonprofits, to make race-conscious grants or implement DEI measures.

In the wake of the latest ruling, supporters of the Fearless Fund and its race-conscious grantmaking program expressed dismay with the appellate court’s decision—and pledged to continue advocating for the right of private institutions to engage in charitable activities according to their values, including by considering race in grantmaking and other programs.

“The court’s decision threatens the right of the charitable sector to address urgent, unmet needs and to strengthen communities nationwide in a diversity of ways,” said Independent Sector president and CEO Dr. Akilah Watkins in a press release. “In undercutting philanthropy’s basic First Amendment protection, this ruling makes it harder to support historically marginalized groups and jeopardizes our work to promote equity and justice. Now, more than ever, our sector is called upon to advocate for equitable policies and systems that help us build a nation where all people thrive.”

“The last thing we want to see is a legal environment that further restricts how private resources can be dedicated to the public good,” added Council on Foundations president and CEO Kathleen Enright. “That’s why we’ll continue to stand for the First Amendment protected right to give charitably according to our values.”

An attorney for the Fearless Fund told the Washington Post that “this is not the final outcome in this case” and that the company is reviewing its options, which include appealing the 11th Circuit’s ruling to the full court or petitioning the Supreme Court to take up the case.

Read more about the legal attacks on DEI initiatives in nonprofits and philanthropy.