TLG Managing Partner Jeff Tenenbaum Quoted in Washington Post Article, “Diversity scholarships decline after legal complaints, Trump’s crackdown”

TLG Managing Partner Jeff Tenenbaum was quoted in a Washington Post article titled, “Diversity scholarships decline after legal complaints, Trump’s crackdown.”

“Still, attorneys say the laws around scholarship criteria are complex, because different rules apply to different types of institutions. For instance, colleges and other educational organizations that receive federal funds are subject to the Title IX civil rights statute banning sex discrimination, but most private foundations are not.

Many of the lawsuits against nonprofits and companies are based on a separate statute (Section 1981 of the Civil Rights Act of 1866) that bars racial discrimination in making and enforcing contracts.

“It is a bit complicated from a legal perspective,” said Jeffrey Tenenbaum, an attorney in Washington, who has worked with tax-exempt organizations for decades and counseled nonprofits about the federal laws covering scholarships.

While the contracting law only bars discrimination based on race and ethnicity, Tenenbaum said it’s also become harder for nonprofits to offer scholarships exclusively for women or men because many colleges and universities won’t accept money where eligibility is restricted by sex due to Title IX.

But changing the scholarship criteria can also create new problems, because nonprofits are obligated to honor any restrictions donors put on the gifts.

In June, the Iowa Supreme Court blocked the University of Iowa from redirecting a private donation meant to help Black students pursuing the physical sciences to one benefiting first-generation students. The court said there wasn’t enough evidence that the new criteria reflected the donor’s wishes and ruled there must be further court proceedings to determine how the funds could be used to abide by both the law and the donor’s intent.

“It’s a tricky line that folks are trying to navigate right now,” said Bright, of the National Scholarship Providers Association.

Bright said changing the criteria can often take a year or more.

In addition, organizations have to be careful not to change the criteria to something that is clearly a “proxy” for race or ethnicity, Tenenbaum said. That could include restricting the scholarships to students attending historically Black colleges, where most of the students are Black.”