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Question: We have been following recent rulings impacting diversity, equity, and inclusion (DEI) efforts including challenges to DEI programs under Section 1981 of the Civil Rights Act. Has there been any guidance on funding around DEI efforts that the Council on Foundations has released or be available to discuss in light of the filings and recent rulings?
Answer: The Council is certainly monitoring pending cases brought under Section 1981 of the Civil Rights Act of 1866 that may affect philanthropy—especially the Fearless Fund and Hello Alice cases. But currently, there are no changes to any legal framework around advancing diversity, equity, and inclusion except in college admissions. The Fearless Fund and Hello Alice cases are pending in the 11th and 5th Circuits respectively, and any decision in either case would be binding only in the respective circuit.
While we are keeping our finger on the pulse of emerging litigation around race-based or race-conscious grantmaking, legally there is no reason that your foundation must change its funding practices. But it is helpful to know that the majority of these actions allege a violation of Section 1981 of the Civil Rights Act, which is a claim that rests on the existence of a contract. The only thing that has changed in light of recent litigation is the risk calculation some foundations are making. To mitigate potential risk involved, we advise that any identity-based funding or grantmaking be reviewed so that it bears as little resemblance to a contract as possible. One of the best ways to do this is to substantially reduce or eliminate any requirement/expectation for performance of any tasks as a result of receiving the grant.
In sum, your foundation can and should continue doing any diversity, equity, and inclusion work that it is doing, and we at the Council will continue to monitor the legal landscape and provide any updates if there are any legal changes in one circuit or several.
Council members are able to send their questions to our Legal team for expert advice and analysis. You can take advantage of this member benefit by becoming a member today.
Welcome to the new Community Foundation Advisory Group Members
The Council's Community Foundation Advisory Group assists with strategic decisions related to the community foundation field, represents the interests of their peers across the country, and elevates the issues of most importance to the sector. And we just added seven new members to the group, bringing it to 20 people! Meet the Community Foundation Advisory Group today.
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