A left-wing nonprofit that has collected millions in federal taxpayer dollars is now facing serious legal trouble—and could lose both its funding and nonprofit status—over a racially discriminatory internship program that violates President Donald Trump’s executive order on DEI policies.
The Croatan Institute, a North Carolina-based organization that claims to fight “structural racism in finance,” is under scrutiny for its BLAISE internship, which gives explicit priority to non-white applicants. The group’s website openly states that preference is given to “students of color or first-generation students from underserved communities,” a requirement that legal experts say runs afoul of federal anti-discrimination laws.
“This is textbook discrimination,” said GianCarlo Canaparo, a senior legal fellow at the Heritage Foundation. “Any entity that receives federal funds is prohibited by Title VI of the Civil Rights Act from discriminating on the basis of race. Giving priority to certain races is a violation of that law—and of President Trump’s executive order banning DEI-based discrimination among federal grantees.”
Croatan has taken in over $4 million in federal grants since 2022, including a $1.9 million award from the Department of Agriculture for fiscal year 2025. Nearly $470,000 of that has already been paid out. Another $40,000 was allocated to host a financial workshop series specifically targeting “BIPOC farmers and landowners.”
But if the group continues to operate its race-based internship, its federal funding could be cut off. “If Croatan wants future grants, or to avoid False Claims Act liability, it will need to end this program immediately,” Canaparo warned.
The problems may go beyond funding. The internship also threatens Croatan’s nonprofit status. “The IRS can revoke the tax-exempt status of a nonprofit that engages in race discrimination,” Canaparo added.
The BLAISE program, launched in 2022, was originally advertised with even more blatant restrictions—stating outright that applicants “must identify as Black, Indigenous, Latinx, or person of color.” It’s part of a larger Croatan initiative called “Racial Equity, Economics, Finance and Sustainability,” which includes a USDA-funded $731,000 project targeting financial services to non-white farmers.
Croatan is far from the only federally backed group caught up in this kind of discrimination. A taxpayer-funded music ensemble previously investigated by The Daily Wire operated a “BIPOC-only” internship that barred whites from applying, and later froze the program under public pressure.
As the Trump administration cracks down on DEI-driven discrimination in federally funded institutions, groups like the Croatan Institute are learning a hard lesson: when you violate federal law to push identity politics, the taxpayer-funded gravy train can—and will—be derailed.