A left-wing nonprofit group that promotes diversity, equity, and inclusion (DEI) initiatives is at risk of losing its federal funding and nonprofit status for allegedly violating President Donald Trump’s executive order.
The Croatan Institute, based in North Carolina, describes itself as working to combat “structural racism in finance” and has received over $4 million in federal grants since 2022. The group is now under scrutiny for its race-based internship program, which appears to run contrary to the President’s executive order that bans DEI policies among institutions receiving federal grants.
The program in question is the “BLAISE” internship, which stands for “BIPOC Leaders Advancing an Inclusive and Sustainable Economy.” According to the institute’s website, the internship gives priority to students of color or first-generation students from underserved communities, aiming to increase representation of minority groups in the finance sector.
“In the world of finance, there is a dearth of people of color,” the organization states on the program’s eligibility page.
A report by The Daily Wire revealed that the program could cost the institute its remaining grant money and future funding opportunities. Among the grants is funding from the Department of Agriculture for a “financial health workshop series for BIPOC farmers and landowners,” which has not been fully paid out.
GianCarlo Canaparo, a Senior Legal Fellow at the Heritage Foundation, told the outlet the internship likely violates federal law and could result in the institute losing its remaining federal funding.
“Any entity that receives federal funds is prohibited by Title VI of the Civil Rights Act from discriminating on the basis of race and other protected categories,” Canaparo said. “Giving priority to certain races, as the BIPOC internship does, is textbook discrimination.” He added that the discrimination could be remedied by way of a federal lawsuit.
“If Croatan continues to receive federal funds, those funds are absolutely in jeopardy,” Canaparo added. “And if Croatan hopes to receive more federal funds in the future, it will have to terminate this discriminatory internship program or it’s likely to face False Claims Act liability in addition to all the other sorts of liability,” he added, highlighting yet another legal risk that the organization appears to have exposed itself to.
The internship was launched in 2020 and initially stated that applicants “must identify as black, indigenous, Latinx, or person of color.” Canaparo noted that such criteria could not only result in the loss of federal funds but could put the organization’s nonprofit status at risk, stating that “the IRS can revoke the tax-exempt status of a nonprofit that engages in race discrimination.”
