AMA Foundation Removes Race-Exclusive Scholarships From Website Following IRS Complaint

The American Medical Association (AMA) Foundation removed three scholarships with explicit racial and ethnic criteria from its website in late April 2026, weeks after a watchdog group filed a complaint with the Internal Revenue Service. The complaint, lodged on April 7 by the medical advocacy group Do No Harm, argued that the race-based scholarships violated federal law and jeopardized the foundation's 501(c)(3) tax-exempt status. The scholarships in question were part of the foundation's Physicians of Tomorrow Scholarship program. According to Do No Harm and archived versions of the website, the removed listings include the Dr. Richard Allen Williams & Genita Evangelista Johnson/Association of Black Cardiologists Scholarship, which awarded $5,000 to medical students of “African American/Black descent.” Also removed was the $10,000 Underrepresented in Medicine Scholarship, designated for students who are “African American/Black, Latine/Hispanic or Indigenous (American Indian, Native Hawaiian, or Alaska Native).” A third scholarship, the $10,000 Patricia L. Austin Family Physicians of Tomorrow Scholarship, was also deleted. This award was designated for students “of Eastern European descent.” Following the removal, the foundation’s website listed 14 available scholarships, down from 17 previously. Do No Harm, an organization that opposes what it calls “identity politics” in medicine, characterized the website change as a significant development. “The AMA Foundation appears to have removed the discriminatory scholarships at the heart of our IRS complaint – a tacit admission that our concerns were warranted,” said Dr. Stanley Goldfarb, chairman of Do No Harm, in a statement. However, he confirmed that the group’s complaint with the IRS remains active, as the foundation has not made a formal public statement about changing its policies. The complaint filed with the IRS alleges that by offering scholarships with racial and ethnic restrictions, the AMA Foundation is operating contrary to established public policy and civil rights laws that forbid racial discrimination. Do No Harm’s argument hinges on a key Supreme Court precedent, the 1983 case Bob Jones University v. United States. In that ruling, the court held that the IRS could deny or revoke the tax-exempt status of a non-profit organization if its activities were found to be contrary to fundamental public policy, specifically in cases involving racial discrimination. “Under Supreme Court precedent, having even one unlawful policy under 26 U.S.C § 501(c)(3), including a racially discriminatory policy, makes the entire organization ineligible for tax-exempt status,” a press release from Do No Harm stated. Dr. Kurt Miceli, the group's Chief Medical Officer, added, “If the AMA Foundation wants to retain its federal tax advantage, it must open its scholarships to applicants of all races.” The action against the AMA Foundation comes amid a shifting legal landscape for race-conscious programs following the Supreme Court's June 2023 decision in Students for Fair Admissions v. Harvard, which effectively ended affirmative action in college admissions. That ruling has prompted legal challenges and internal reviews of diversity, equity, and inclusion (DEI) initiatives not only in higher education but also in corporate and non-profit sectors. Legal experts have noted that the court's reasoning could be applied to challenge race-based criteria in grants, scholarships, and employment programs outside of university admissions. The AMA Foundation is the philanthropic arm of the American Medical Association, the largest association of physicians and medical students in the United States. As a 501(c)(3) organization, its income is exempt from federal taxes, and donations made to it are tax-deductible. This status is contingent on operating for charitable purposes and not violating public policy. Neither the AMA Foundation nor the IRS has issued a public comment on the complaint or the subsequent removal of the scholarships from the website. For non-profit organizations and the businesses that support them, this development is a critical compliance warning. The legal environment for any program that uses race or ethnicity as a criterion is becoming increasingly fraught with risk. In our experience, many well-intentioned non-profits have established programs that, while aimed at promoting equity, may now be vulnerable to legal challenges that threaten their core operational status. Good intentions are not a sufficient defense against IRS scrutiny or litigation that could invalidate an organization's tax-exempt status. This is a core issue of tax preparation and compliance, as maintaining 501(c)(3) status requires rigorous adherence to a public policy landscape that is clearly and rapidly evolving. We strongly advise clients to conduct thorough internal audits of all scholarships, grants, and hiring initiatives to identify and mitigate these emerging risks. To ensure your organization's activities align with current legal standards, contact C&S Finance Group LLC at csfinancegroup.com for a comprehensive compliance review. Moving forward, the focus will be on the IRS and its response to Do No Harm's still-active complaint. Any formal action or guidance from the agency could set a major precedent for thousands of other non-profits that offer similar demographic-specific grants and scholarships. In the meantime, non-profit boards and corporate foundations across the country will likely be re-evaluating their own programs in light of the AMA Foundation's quiet but significant website update.