The Do (More) Good (Better) Newsletter™ #25

The Do (More) Good (Better) Newsletter™ #24

Beyond Advisers Discusses "Strategic Ambiguity" around DEI orders with the Chronicle of Philanthropy

Scott Curran recently spoke with the Chronicle of Philanthropy about the Trump administration’s executive orders targeting DEI initiatives. He described the orders as intentionally vague and overwhelming — a form of “strategic ambiguity” designed to confuse and chill action.

While some organizations may scale back or rebrand their efforts in response, others are choosing to resist by publicly reaffirming their commitment to equity. The full article explores the legal uncertainty surrounding the crackdown — and the urgent need for clarity, courage, and strategy within the philanthropic sector.

Read the article below.

‘Strategic Ambiguity’ of Trump DEI Orders Raises Big Questions About What’s Legal

Progressives have criticized the orders for being vague and attacking a concept — DEI — that does not have an agreed-upon legal definition. Conservatives argue that race-based grant making amounts to illegal discrimination.

By Alex Daniels

A salvo of White House executive orders aiming to snuff out diversity, equity, and inclusion programs has triggered nearly a dozen lawsuits challenging their constitutionality. The court actions in the first weeks of the Trump administration have led to dizzying rounds of motions, preliminary injunctions, and other court orders that have left progressive grant makers reeling.

With the issue unresolved in the courts, foundations and nonprofits that make grants on the basis of race or support programs that promote diversity are calling their lawyers, even if they are not yet involved in court cases. Some are scrubbing their websites and other published materials free of anything suggesting they are promoting DEI. Others are carrying out their work while watching over their shoulder in anticipation of the enforcement promised by the president regarding these orders.

The memos, written in the first week of Trump’s presidency, and accompanying orders on immigration, gender, and a host of other policy areas were intended to have a chilling effect that would paralyze progressive institutions searching for an effective response, said Scott Curran, a lawyer who served as general counsel of the Clinton Foundation for two years beginning in 2014.

“These orders are written in many cases with a strategic ambiguity,” he said. “They are chaotic and overwhelming by design.”

Curran called the orders a “values stress test” for the nonprofit sector. Some organizations that may not have been fully committed to diversity, equity, and inclusion — but made “performative” adjustments to signal they were on board — may have already retreated. Others may already be reframing their work such as by dropping things like the acronym DEI to describe their grant making. Or, he said, nonprofit organizations can resist by remaining publicly committed to the cause.

Issued just days into his presidency, Trump’s orders have attempted to roll back decades of affirmative-action policies in federal contracting that date to the Johnson administration, shutter government DEI offices and programs, and put large private foundations and corporations on notice that any involvement in “illegal” DEI activities could result in an unfriendly call from the Department of Justice.

Private foundation leaders, many of whom redoubled their commitments to supporting racial equity following the 2020 police murder of George Floyd, had long expected a backlash from conservative legal activists opposed to racial preferences. Those expectations materialized in 2023, when the Supreme Court ruled against college admissions based on race — an area where the use of racial preferences had long been debated.

While the 2023 Supreme Court cases brought by Students for Fair Admissions against Harvard and the University of North Carolina were limited to college admissions, conservative litigation nonprofits quickly began testing the decision in cases against companies and grant makers, perhaps most notably in a case Edward Blum, who led the Supreme Court admissions cases, filed against the Fearless Fund, a Georgia venture-capital firm and associated foundation that ran a program which awarded grants exclusively to Black women entrepreneurs. The case was settled in September, before it went to trial.

Left-leaning nonprofit leaders argue that there is nothing illegal about providing a grant or offering a program on the basis of race. Doing so, they argue, is part of a multigenerational attempt to reduce racial disparities in health, education, and wealth and redress a long history of harms inflicted upon Black people and people of other backgrounds in America. The Trump memos and conservative nonprofit experts view any attempt to treat people differently based on their race as anathema to American ideals of equality. According to this viewpoint, any program that isn’t race neutral, with very few exceptions, fails to treat Americans with equal dignity and respect.

Progressive nonprofit leaders have criticized the orders for being vague and attacking a term — DEI — that does not have an agreed-upon legal definition.

But laws forbidding discrimination based on race are quite clear, said Dan Morenoff, executive director of the rightleaning American Civil Rights Project. While the laws prohibiting discrimination in federal contracting and both private-sector and federal employment are laid out in Title VI and Title VII of the 1964 Civil Rights Act, respectively, conservative litigators like Morenoff point to an older civil rights statute, passed in 1866, to make their case that race-based grant making amounts to illegal discrimination.

Section 1981 of the 1866 act forbids using race as a guiding criteria in finalizing contracts between private parties. Before the Fearless Fund case was settled, a three-judge panel in the 11th Circuit Court of Appeals ruled that by exclusively offering a grant to Black women, the Fearless Fund likely violated the 159-year-old law.

“The laws that are in play here are remarkably straightforward,” Morenoff said. “If the president’s instructing agencies to enforce them has a chilling effect on someone’s activity, then what it’s chilling is illegal activity that should be chilled. There’s nothing wrong with chilling intentional violations of law.”

There are occasions when a private or government institution can take an action based on race, conservative experts like Morenoff believe. If a foundation’s grant making had specifically caused harm to an identifiable group of people in the recent past based on their race, it could make grants to remedy the harm it caused. Or a state prison agency could separate incarcerated people based on their race during a race riot, he said.

Progressive nonprofit leaders generally argue that a grant is a gift rather than a contract, and as such, giving a grant on the basis of race is protected by the First Amendment. In a preliminary decision in one of the executive-order cases in March, U.S. District Court Judge Matthew Kennelly, a Clinton appointee in the U.S. District Court for Northern Illinois, temporarily blocked the Department of Labor from requiring a nonprofit federal grantee, Chicago Women in Trades, to certify that it was not involved in any DEI work on the basis that doing so would likely violate the group’s freedom of speech.

Diversity, equity, and inclusion efforts are essential ingredients for a sustainable multiracial democracy, said Glenn Harris, executive director of Race Forward, a progressive racial-justice advocacy nonprofit. He called the Trump administration’s efforts to extinguish DEI “anti- American.”

“It’s bullying at its core,” Harris said.

By focusing on whether a contract technically discriminates on the basis of race misses the point, Harris said. The 1866 act, passed when the echoes of Civil War cannons had barely dissipated, was meant to protect formerly enslaved people from being taken advantage of when signing business contracts. And every civil rights law passed since, Harris said, was meant to address unfairness to Black and Brown people, women, and other protected classes.

“As we get hit with all of this, we shouldn’t lose sight of why these programs were created in the first place,” he said. “The question is: ‘Who is actually being discriminated against and who actually experiences bias?’”

A Gray Zone of Law and Public Policy

As the cases are argued in court, agency heads have been directed to take action. Each federal agency is expected to identify a total of nine corporations, large universities, foundations, or nonprofits that may be promoting DEI work and direct what they find to the attorney general.

It’s not clear whether any large foundations — 346 meet the minimum standard of $500 million in assets set by the Trump order — will be on the final list. Universities, for instance, are a “target rich” environment for the Department of Education, Morenoff said.

A recent Wall Street Journal opinion piece suggested that Trump “enlist the most fearsome agency of the federal government: the Internal Revenue Service.” The IRS, argued James Taranto, the paper’s editorial features editor, could yank the nonprofit status of any university that flouted established federal policy. To make its case, the Journal oped cited a 1983 Supreme Court case, Bob Jones University v. the United States.

In the Jones case, the court ruled that the IRS could revoke Bob Jones University’s nonprofit status because the Christian school’s prohibition against interracial dating violated “fundamental public policy.”

As DEI is fought over in the courts, Morenoff said the IRS could take administrative action.

“Could [the IRS] Bob Jones people? Yeah, they could,” said Morenoff. “If you are a nonprofit and you are racially discriminating, you put your tax status at risk.”

Other experts doubt the IRS has the authority to revoke an organization’s tax-exempt status because it supports DEI programs. The newly minted Trump administration’s pronouncement on DEI doesn’t constitute a fundamental piece of public policy, a requirement under the Supreme Court’s ruling in the Bob Jones case, said Ellen Aprill, senior scholar in residence at the UCLA School of Law.

“I don’t think it can possibly meet the standards,” said Aprill, who previously served in the U.S. Treasury Department’s Office of Tax Policy. “One administration’s position on an issue is not fundamental public policy.”

Navigating Federal Scrutiny

Fearing scrutiny from the White House and federal agencies, some grant makers have backed away from their DEI programs. The Chan Zuckerberg Initiative, the philanthropy started by Facebook co-founder Mark Zuckerberg and his wife, Priscilla Chan, in February decided not to extend a fiveyear $500 million effort to promote diversity and reassigned staff working on DEI issues to other parts of the organization. And the Howard Hughes Medical Institute, also in February, canceled a $60 million effort to attract and retain a diverse mix of students in university engineering and science programs.

Other organizations are attempting to remain faithful to their missions while using different language to describe their work. Instead of targeting their grant dollars to leaders of a specific race or to programs to benefit, for instance, Black or Latino people in a specific area, some are using other

criteria.

Directing money to grant recipients in a certain Zip code, which might be predominantly Black or to grantees who write essays about their experience leading racial-justice activities, can have a similar result as grants awarded because of race, without spelling out a specific race requirement.

Outwardly, a proxy for race isn’t discriminatory, but if it has the same effect as favoring certain applicants because of their identity, it is just as pernicious, according to John Sailer, a senior fellow at the Manhattan Institute, a conservative

think tank.

“These are ostensibly race-neutral criteria,” he said. “But behind the scenes, it becomes a tool for a set of racial preferences designed to create a smokescreen for overt discrimination.”

So-called proxies for race may no longer fly in the Trump administration. In a February 14 letter outlining DEI policy, the Department of Education said activities that appear to steer clear of race but have the intention of singling out people by their background will not be tolerated at the college level, and the letter suggested it was verboten in other areas as well.

“Although some programs may appear neutral on their face, a closer look reveals that they are, in fact, motivated by racial consideration,” the letter reads. “Race based decision making no matter the form remains impermissible.”

The attempt to go after substitutes for race marks a new aggressiveness on the part of the Trump administration, said Julia Judish, a lawyer at Pillsbury Winthrop, Shaw Pittman, who conducts “DEI audits” for her nonprofit clients that seek to determine their exposure to being sued, assess their risk tolerance, and suggest possible changes in their written materials regarding DEI.

The administration’s laser focus on DEI may prompt fearful grant makers to overreact, she said.

“Foundations, nonprofits, and universities are left having to overcomply — to not speak about or not do things which they believe are lawful because there is an enforcement threat against them,” she said.

Other nonprofit leaders are cautioning their peers not to overreact.

A coalition called the Racial Equity Advancement and Defense Initiative — formed by ABFE (formerly known as the Association of Black Foundation Executives), Asian Americans/Pacific Islanders in Philanthropy, Hispanics in Philanthropy, and Native Americans in Philanthropy — urges nonprofits that receive cease-and-desist orders related to their DEI programming to be suspicious. Under the guidance of legal counsel, said E. Bomani Johnson, ABFE’s senior director of special initiatives, nonprofits should determine exactly which law they are being accused of violating.

“The way to approach this stuff is to really examine and interrogate it,” he said.

While ABFE has taken some actions to protect its employees, such as removing their names and images from its website, the current backlash against DEI has prompted members of the group to dig in and devote themselves more deeply to racial equity. The coalition wrote a set of recommendations for organizations that want to continue to support a DEI approach.

The recommendations include urging philanthropic peers to stay the course, to offer no-strings-attached grants that can be described as gifts rather than contracts, and to unleash more money to grantees advancing racial justice.

Johnson suggests that foundations enshrine a commitment to racial equity in their bylaws, so an institution’s support of DEI outlives the current generation of leaders.

While Johnson says ABFE is responding to the executive orders by being more explicit about its commitment to DEI, he said it is understandable that other organizations, particularly those with a large share of revenue coming from federal grants, might want to moderate their approach. Making some changes doesn’t mean an organization is selling its soul — it might be necessary to stay on course and continue into the future.

“It’s not our way or the highway,” he said. “People and organizations have different political or social realities.”