You may have already read that the Trump administration has signed several executive orders that prohibit DEI practices, policies, and programs throughout the federal government and instruct agencies to pursue the end of DEI policies in the private sector. (Ending Illegal Discrimination and Restoring Merit-Based Opportunity, Ending Radical and Wasteful Government DEI Programs and Preferencing, etc.)
What does this mean for nonprofits now?
Under the new administration’s series of DEI-related executive orders, nonprofits that receive government grants or serve as government contractors will be subject to liability under the False Claims Act (FCA) for maintaining DEI programs.
To be clear, Venable LLP states that:
- The prohibition on DEI-related employment practices “is not limited to employment under a contract or grant, but will be applied across the board.” That is, the new rule prohibits federal contractors and subcontractors from considering “race, color, sex, sexual preference, religion, or national origin in ways that violate the Nation’s civil rights laws” in all of their employment practices.
- When implemented, any government contractor or grant recipient who continues to engage in prohibited discrimination or maintains certain DEI policies will risk liability under the FCA. This risk is especially high because the FCA incentivizes employees to bring FCA suits on behalf of the government.
In addition, the National Council for Nonprofits notes that the new executive orders:
- Instruct all federal agencies to terminate any DEI-related contractors.
- Direct the Office of Management and Budget and the Office of Personnel Management to coordinate with all federal agencies to terminate all DEI programs in federal agencies, including equity-related grants.
It’s important to note that these executive orders will likely be subject to challenges that may delay their implementation.
GCN will be monitoring this situation and updating the nonprofit community as developments take shape.