The Bill and Melinda Gates Foundation and two other nonprofits are facing legal scrutiny for allegedly running scholarship and advancement programs that exclude white Americans—potentially violating federal law and jeopardizing their tax-exempt status. The American Alliance for Equal Rights (AAER) filed formal complaints with the IRS against the Gates Foundation, the Lagrant Foundation, and Creative Capital Foundation.
AAER president Edward Blum argued that these programs amount to racial discrimination, stating, “Organizations that discriminate based on race—whether their intentions are benevolent or not—are not eligible for public subsidies through the tax code.” The complaints urge the IRS to investigate and, if appropriate, revoke each organization’s tax-exempt status.
The Gates Foundation’s “Gates Scholarship” specifically limits eligibility to students from minority groups—explicitly naming African American, Hispanic American, Asian American, and Native American students, while excluding white applicants. AAER claims this constitutes intentional racial discrimination and violates standards required for federal tax exemption.
Similarly, the Lagrant Foundation is accused of running programs that exclude white Americans from scholarships and job development opportunities in the fields of marketing, public relations, and advertising. The foundation partners with major corporations such as Walmart and Microsoft and accepts only applicants from selected ethnic backgrounds, including African Americans, Alaska Natives, Asian Americans, and Hispanics.
Creative Capital, which teamed up with the Skoll Foundation and crowdfunding platform Kickstarter, is also under fire. Their $500,000 arts fund is limited to “Asian, Black, Indigenous, and Latinx” creators. Selected recipients received not only funding but also exclusive access to educational resources and strategic guidance—benefits denied to white applicants.
“These organizations are free to operate as they wish—but not with the public subsidy that tax-exempt status provides,” Blum emphasized. “Racial discrimination—whether in scholarships, professional development, or artistic grants—violates public policy and must not be underwritten by American taxpayers.”
AAER’s actions point to a growing pushback against the use of race-based criteria in Diversity, Equity, and Inclusion (DEI) programs across the public and private sectors. Similar controversies have surfaced in Massachusetts, where a music nonprofit operated a BIPOC-only internship, and in corporate America, where companies such as Apple, McKinsey & Company, Oracle, and NASCAR have reportedly excluded white applicants from DEI initiatives.
