In the male-dominated entertainment industry, women of color often face discrimination, as experienced firsthand by news anchor Cathleen Trigg-Jones. To address this issue, Trigg-Jones launched iWoman TV, a media company featuring shows with female leads. However, sustaining the business proved challenging due to a lack of funding. Trigg-Jones applied for funding from various sources but was consistently denied, with reasons cited such as the company not making enough money and being too new. Fortunately, the Fearless Fund, a Black women-owned venture capitalist firm, took a chance on Trigg-Jones and awarded iWoman TV a $20,000 grant in 2022. This grant enabled the company to scale operations and provide funding for female content creators to start or complete their film projects.
However, the Fearless Fund's grant program has come under legal scrutiny from the American Alliance for Equal Rights (AAER), a conservative group that argues the grants amount to racial discrimination under the 1866 Civil Rights Act. In response to the AAER's legal challenge, a federal appeals court temporarily blocked the Fearless Fund from exclusively awarding grants to Black women entrepreneurs. CNN has reached out to the Fearless Fund for comment on the ongoing lawsuit. Led by conservative legal strategist Edward Blum, the AAER has a history of challenging affirmative action, including the case that dismantled affirmative action in college admissions. Blum also sued two international law firms over their diversity fellowships but dropped one of the lawsuits after the firm decided to open its fellowship to all associates.
Blum believes his legal campaign against affirmative action and grant programs like those offered by the Fearless Fund is a matter of fairness. He argues that civil rights laws do not permit racial distinctions, regardless of over or underrepresentation in various endeavors. The AAER's legal challenges have sparked concerns among civil rights activists and Black business leaders, who fear that successful lawsuits could roll back decades of progress in leveling the playing field for Black and brown people in the workplace and small business sector.
According to a 2019 report from American Express, Black women are the fastest-growing demographic of entrepreneurs in the United States. However, the intersectionality of being Black and a woman poses additional challenges in securing finances for their businesses. Black business owners are turned down for loans at a rate three times higher than White business owners, according to a 2020 analysis by Goldman Sachs. Furthermore, in 2020, businesses founded solely by women received only about 2% of venture capital funding, according to PitchBook.
Fearless Fund co-founder and CEO Arian Simone acknowledges the existence of disparities but argues that dedicated funding resources for Black entrepreneurs are necessary to achieve equal footing with their White counterparts. Rashae Barnes, founder of Evals Equity, faced her own roadblocks to entrepreneurship, leading her to create an investment fund for businesses owned by women of color. Evals Equity has successfully raised over $100,000 and funded more than 40 women of color entrepreneurs in various industries.
The legal challenges faced by diversity initiatives, including those targeted at promoting equity and inclusion, are seen as a potential setback by experts. With Republican lawmakers increasingly criticizing such programs and a conservative majority on the Supreme Court undermining affirmative action, there is a sense of caution among companies. This caution stems from concerns about potential lawsuits and the reversal of programs that have been put in place to address inequalities.
The racial wealth gap remains a significant issue, with Black households having a median net worth of $44,900 in 2022 compared to $285,000 for White households, according to the Federal Reserve's Survey of Consumer Finances. Lenwood Long, president and CEO of the African American Alliance of Community Development Financial Institution CEOs, highlights how centuries of discrimination and systemic racism have created barriers for Black Americans in achieving economic parity and justice. Lack of generational wealth and collateral for loans are common obstacles faced by Black entrepreneurs. However, organizations like the Fearless Fund play a crucial role in providing access to capital and helping Black individuals build wealth.
Overall, the challenges faced by Black women entrepreneurs, the legal battles over grant programs, and the persistent racial wealth gap reflect the ongoing need for dedicated funding resources and efforts to level the playing field. The outcomes of the ongoing legal challenges will undoubtedly have significant implications for diversity initiatives and the pursuit of economic equality for marginalized communities.
