The war on DEI and what nonprofits can do
And more evidence that the current administration is out to get nonprofits
Image description: Screenshot of the top of the AG’s memorandum.
The Trump Administration’s Executive Order on Ending Radical and Wasteful Government DEI Programs and Preferencing issued on Inauguration Day (January 20) sent shock waves through the nonprofit and public sectors. It was very unclear what the actual legal implications of the EO were, but it has had a chilling effect on Diversity, Equity, and Inclusion (DEI) programs, hiring of DEI professionals, and programs designed to redress the effects of historical and current racial discrimination.
Many nonprofits have responded by scrubbing their websites, grant proposals, and materials of key words related to DEI. For others, DEI work is so central to their identity and mission that it is impossible to tinker with wording and satisfy the demands outlined by President Trump. For all, there has been confusion and a lack of clarity regarding how to navigate the situation. It is important to note that an executive order is guidance from the President to federal agencies and not a change in the law.
At the end of July, US Attorney General Pam Bondi issued a memo with “guidance for recipients of federal funding regarding unlawful discrimination.” This memo also does not have the force of law, but it provides “best practices as non-binding suggestions to help entities comply with federal antidiscrimination laws and avoid legal pitfalls.” It is helpful in that it outlines the administration’s position and provides specific examples of the types of preferential programs, hiring practices, and trainings may run afoul of antidiscrimination laws. It is one tool to help nonprofits, particularly those that receive federal funds, manage risk.
Today the National Council of Nonprofits presented a webinar regarding what nonprofits need to know about the current federal grant landscape. It was informative and concerning. Yet another EO, the Executive Order on Improving Oversight of Federal Grantmaking, came out on August 7. Once implemented, this will likely further constrain agency review processes, slow down payments, and require nonprofits to sign certifications that expand federal control over their actions.
According to the expert on the webinar, nonprofits need to make sure they know whether they are receiving any federal funds (which can be passed through state and local government) and should review grant contracts, including renewals, carefully to catch new requirements and decide if they are able to comply before signing and accepting funds.
The Department of Justice has also announced plans to weaponize an existing law called the False Claims Act in service of a newly established Civil Rights Fraud Initiative. This entity will pursue claims against any recipient of federal funds that violates civil rights law, with violations resulting in treble damages and significant penalties. They will be accepting qi tam actions, which allows anyone to make a whistleblower accusation against a nonprofit or other federally-funded organization and potentially share a portion of the monetary recovery (incentivizing anti-DEI activists to investigate organizations and file claims).
To reduce risk as an organization (regardless of whether you receive federal funds), consider auditing your policies and procedures to ensure that you do not have any practices that may no longer be legal, such as preferential hiring practices or a scholarship or internship program that “uses race, sex, or another other protected characteristic as a selection criteria.” These practices were illegal prior to Trump’s return to the White House, but some nonprofits may not have caught up with changes to the legal landscape such as the Fearless Fund decision.
Regarding use of language that may be a trigger for scrutiny, it is not known to what extent the administration may target nonprofits that it believes are engaged in DEI or other “anti-American” practices. We do know that AI tools make it easier to search for keywords or concepts on websites or documents. The experts on the webinar advised that if an organization can easily change some wording to reduce risk, they may wish to consider it. Most DEI language is probably legal but could increase your exposure to having to defend yourself, which is something most nonprofits are unprepared to do.
All this is yet more evidence that the Trump administration has truly launched a war on nonprofits. I am grateful to the National Council on Nonprofits and others for continuously educating me about what is happening, and I encourage all of you to join the National Council on Nonprofits’ mailing list and join the Nonprofit Association of Washington (or your state’s nonprofit association) to support their work as well as local advocacy.