'He's testing the case for bigger things:' A deeper look at the Fearless Fund lawsuit

Stephanie Ellis-Smith wants everyone to know that focusing investments and funding on women and people of color is not illegal.

“It’s just not. Full stop,” she said.

Ellis-Smith has been following the case against Atlanta-based Fearless Fund, which has been sued by a conservative group alleging that its effort to hand out $10,000-$20,000 grants to Black women-owned businesses violates a Reconstruction-era law that, somewhat ironically, was put in place to protect former enslaved people and grant them basic civil rights.

While Ellis-Smith is clear, she’s not a legal scholar, she is the founder and CEO of Phila Engaged Giving and is a chartered advisor in philanthropy. She is also a Black woman who has spent years researching her family’s genealogy. Turns out, her family has a long history of fighting for their rights.

“I’ve been reading written testimony of my old ancestors who were suing. They stood in line every day to get it written down that they were owed recompenses from their former masters and the county,” Ellis-Smith said.

That makes the case Edward Blum and his American Alliance for Equal Rights — the same group that successfully overturned the use of affirmative action in college admissions — have filed feel personal.

“It’s such an absolute affront,” she said. She is regularly having conversations with attorneys and representatives from a number of charitable organizations who are worried that the work they are doing could be found to be illegal should this case prevail.

But Ellis-Smith’s message is clear. No one should be concerned about continuing to fund and support organizations that distribute funding to disadvantaged groups.

“There are some really powerful philanthropic groups who have said: ‘You want to sue us? We’re ready,’” Ellis-Smith said. “That’s what philanthropy is for, in my book.”

The Ford Foundation, for example, spoke out late last year in support of the Fearless Fund and filed an amicus brief in support. The argument is a basic one: Independent organizations have the right to free speech under the First Amendment, and charitable giving is a form of that speech.

“Our grantmaking is the ultimate expression of our fundamental belief in equal opportunity and human dignity,” Ford Foundation President Darren Walker said in an open letter.

Additionally, the MacArthur Foundation stated that it “will use all the legally available tools at our disposal to pursue our goals of racial justice” and the Council on Foundations issued a public statement signed by more than 200 nonprofit groups in support of the Fearless Fund.

The case remains in the U.S. Court of Appeals for the 11th Circuit in Florida, and a decision is expected any day. It seems likely, however, that it could end up in the Supreme Court regardless of the outcome of the lower court’s ruling.

This is just a test case though, Ellis-Smith said, and regardless of the outcome, is unlikely to be the last.

“This person (Blum) is worth billions,” she said. “He’s testing the case for bigger things like women on boards, and every DE&I initiative you can think of. That’s why I think the Fearless Fund case is so seminal.”