The Supreme Court's recent decision on affirmative action in Students for Fair Admissions v. President and Fellows of Harvard College has far-reaching implications for educational institutions and nonprofit organizations promoting diversity, equity, and inclusion. This article summarizes the Supreme Court's decision and its potential effects on nonprofits, including how they may need to reassess their race-conscious programs and diversity initiatives to navigate the new landscape.

Overview of the Supreme Court's Decision on Affirmative Action

The case, decided on June 29th, 2023, was brought by Students for Fair Admissions (SFFA), a nonprofit organization known to litigate against race-conscious admissions policies used by higher education institutions.

What was the legal issue?

The legal issue at hand was whether admissions policies at Harvard College and the University of North Carolina violated the Equal Protection Clause of the Fourteenth Amendment.

The Equal Protection Clause of the Fourteenth Amendment provides that a State may not “make or enforce any law which shall … deny to any person within its jurisdiction the equal protection of the laws.” The purpose of the Equal Protection Clause is “to eliminate all official state sources of invidious racial discrimination in the States.”

In the context of education, the Equal Protection Clause was employed to determine that the right to public education “must be made available to all on equal terms,” requiring schools to admit students on a “racially nondiscriminatory basis” in Brown v. Board of Education.

Two-Step Test for Allowing Differential Treatment

Any law seeking to treat individuals differently based on race must survive strict scrutiny—a two-step test in which the State must prove that the law serves a compelling governmental interest and that the law in question is “narrowly tailored” to achieve this interest.

Race-conscious admissions policies implemented by institutions of higher education receiving federal funding are placed under the lens of strict scrutiny because they are required to comply with federal anti-discrimination laws.

Case Law Around this Affirmative Action

Regents of the University of California v. Bakke

In Regents of the University of California v. Bakke, the Supreme Court had determined that “obtaining the educational benefits that flow from a racially diverse student body” is a constitutionally permissible interest under the strict scrutiny test.

However, the Supreme Court has limited how race may be considered in admissions to ensure that it is narrowly tailored to the goal of diversity. For instance, the Court in Bakke struck down the University of California's policy of setting aside 16 out of 100 seats in its medical school for minority students. The result was that race could be considered a positive factor in the school's overall candidate assessment.

Students for Fair Admissions v. Harvard

In his majority decision for Students for Fair Admissions v. Harvard, Chief Justice Roberts identified three essential requirements for affirmative action programs based on precedent. First, an affirmative action program must survive the strict scrutiny test. Second, an affirmative action program may not use race as an illegitimate stereotype or negative factor when considering a candidate. Finally, an affirmative action policy must have a logical endpoint.

State Interests

The Supreme Court determined that Harvard and UNC's admissions policies fail at each criterion and, therefore, must be invalidated under the Equal Protection Clause. Under strict scrutiny, the state interests of Harvard and UNC—training future leaders, acquiring new knowledge based on diverse outlooks, promoting a robust marketplace of ideas, and preparing engaged and productive citizens—were deemed commendable but “not sufficiently coherent” because of their elusive and unmeasurable nature.

Overly Broad and Imprecise

The Court also determined that the admissions programs at both UNC and Harvard used categories for race that were overly broad and imprecise. Thus, the policies assessing race as a factor were not sufficiently tailored to achieve the universities' stated interests.

Race as a Negative Factor

Justice Roberts also argued that considering race as a positive for some also necessitates using race as a negative factor because “[a] benefit provided to some applicants but not to others necessarily advantages the former group at the expense of the latter.” In this way, race-conscious admissions programs engage in racial stereotyping. “When a university admits students on the basis of race, it engages in the offensive and demeaning assumption that [students] of a particular race, because of their race, think alike.”

No Logical End Point

Finally, the Court determined that Harvard and UNC's admission programs lack a logical endpoint. Respondents state that the end will come when meaningful representation and diversity can be achieved on college campuses without such programs. However, measuring this outcome would require “outright racial balancing,” which goes against the Constitution's command that “the Government must treat citizens as individuals, not simply as components of a racial, religious, sexual or national class.”

The Supreme Court determined through this analysis that “ameliorating societal discrimination does not constitute a compelling interest that justifies race-based state action.”

 “[N]othing prohibits universities from considering an applicant's discussion of how race affected the applicant's life, so long as that discussion is concretely tied to a quality of character or unique ability that the particular applicant can contribute to the university.

What Nonprofit Leaders Are Saying About the Decision

In days following the Supreme Court's decision, many nonprofits have expressed their commitment to racial equity and diversity in higher education, asserting that they will continue working towards the nation's ideals of equality for all communities and individuals.

On June 29th, a coalition of over fifty philanthropic organizations which represent grantmakers who provide access to educational opportunities issued a joint statement in response to the Students for Fair Admissions v. Harvard decision:

“Our nation's future prosperity, vitality, and unity depend upon America becoming a true multiracial democracy—an aspiration that requires racial equity and diversity in higher education. Despite today's ruling, our foundations will not waver in our commitment to those making the nation's high ideals a reality for all communities and all people.”

Akilah Watkins, the president of Independent Sector, a nonprofit and philanthropy membership group, noted that the decision “could touch how [nonprofits] hire, build our boards, make funding decisions, and design and deliver our programs.”

What Types of Nonprofits May Be Affected by This Decision?

The Supreme Court's decision will probably affect those nonprofits which provide grants and scholarships to minority students. Race-conscious financial aid programs will be the next battleground for the affirmative action debate.

Since the Supreme Court's affirmative action decision, the University of Kentucky and the University of Missouri system have decided to remove race as a criterion in scholarship programs. The Missouri Attorney General, Andrew Bailey, has announced that he had told colleges in the state to immediately stop using illegal, discriminatory race-based policies in making decisions about “admissions, scholarships, programs, and employment.”

Thoughts from Legal Scholars

Scholars are divided on the scope of the Supreme Court's decision and whether its application should extend to scholarship programs, which could affect nonprofit organizations.

Some legal scholars believe the decision is narrow in its application to race-conscious admissions. Liliana Garces, a scholar on Education Law at the University of Texas, asserts, “[i]t'll be important for institutions to hold their ground and be able to engage in those other practices that are foundational to their mission,” such as minority scholarship programs.

Erwin Chemerinsky, dean of the University of California, Berkeley, School of Law, argues that the Supreme Court's decision implies that race-based scholarships will no longer be allowed under federal anti-discrimination laws. In California, a state which banned affirmative action in 1996, race-based scholarships have also been eliminated. Chemerinsky believes that private donors and foundations that receive no federal funding can continue providing race-based scholarships as long as the university does not administer the funds.

Title VI of the Civil Rights Act of 1964 also provides that no one may be “excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance.” The decision by the Supreme Court will likely impact how Title VI discrimination claims against nonprofits receiving federal funds to support minority students will be adjudicated.

The Ruling and the IRS

The Hewlett Foundation commissioned a memo on the impact of the Students for Fair Admissions v. Harvard decision on nonprofit organizations. It warns that the IRS may expand its current non-discrimination requirements.

As of the writing of this article, 501(c)(3) schools may be stripped of their tax-exempt status if they are found to be violating anti-discrimination requirements. This policy may be extended to other nonprofit organizations which promote diversity through race-conscious scholarships and grantmaking.

The memo also warns that race-conscious grants and scholarships may be found in violation of 42 U.S.C. §1981, which requires that all persons in the United States shall have the same right … to make and enforce contracts … as is enjoyed by white citizens.” This law essentially prevents discrimination based on race in contractual activities, which could apply to grantmaking and the awarding of scholarships to minority students.

Based on these potential new pitfalls, nonprofit organizations may need to reassess their race-conscious programs and diversity, equity, and inclusion initiatives.

Navigating the New Landscape for DEI Initiatives

Nonprofits that utilize race-conscious programs for admissions or scholarship selection may need to reevaluate their approaches to comply with the Court's guidelines. Rather than relying solely on race, these organizations can consider applicants' unique experiences and qualities that contribute to their character and ability to enrich the institution's community.

Schools and educational nonprofits impacted by the Supreme Court's decision may leverage college essays to identify students of color to achieve a racially diverse campus.

DEI in Employment Matters

The decision may also impact diversity, equity, and inclusion efforts in the employment arena. Both for-profit and nonprofit organizations should review their DEI initiatives, such as diversity-related training and employee affinity groups, to ensure they do not stereotype employees based on race. Organizations should also review their employment practices against current federal and state employment laws to ensure their policies are current.

The Supreme Court's decision on affirmative action in Students for Fair Admissions v. Harvard has significant implications for both educational institutions and nonprofit organizations. While the ruling addresses the use of race in admissions programs, nonprofits may need to reassess their approaches to comply with the Court's guidelines if the decision is extended to considering race in scholarship and grant programs.

By embracing individual experiences and promoting inclusive environments, nonprofit leaders can navigate the new landscape for diversity, equity, and inclusion initiatives while upholding their commitment to equal opportunities for all.

Questions?

If you have any questions about how the recent Supreme Court decision may impact your nonprofit or your company's DEI initiatives, contact us today for a free consultation.