As I see it, the Folk Alliance opened itself to trouble when it entered into a contract with a corporation with a history of civil rights violations (see Spaw's link in Part 1). The leadership of the FA may not have known the hotel chain's history when they signed the contract, but ignorance then is not an excuse now. If I was the FA I would consider the contract as breached by the Adams Mark chain and refuse to do business with them until they settle all outstanding cases and prove themselves to be in compliance with the spirit and the letter of the civil rights laws. And I would make plans to take my meeting elsewhere immediately.
Would they be sued for breach of contract? Probably. Do they have a defensible position? As a non-profit organization, they stand to lose more(in terms of credibility, goodwill and future membership dollars)through fulfillment of a contract under the current circumstances than Adams Mark loses in dollars alone. So you counter-sue and let the chips fall where they may.
If worse comes to worse and the FA loses in court, they could seek bankruptcy protection or fold up shop as the "Folk Alliance" and re-surface as "The Affiliation of Folk Artists". They would lose nothing but money.
Here's a quote from Woody Guthrie:
"I could hire out to the other side, the big money side, and get several dollars every week just to quit singing my own kind of songs. . .But I decided a long time ago that I'd starve to death before I'd sing any such songs as that."
Woody was talking as an individual singer, but the principle applied to an organization remains the same. The song that "the folk movement" has always sung has been about social justice and moral/ethical responsibility. Maybe the marketing of the music means that this is no longer a factor. If that's so, the Folk Alliance may as well put its guitars away and turn on the radio, because "The radio waves and your movies and your jukeboxes and your songbooks are already loaded down and running over with such no good songs as that anyhow".