Beyond the Acronym: Equity Strategy When DEI Is Under Fire

The Current Landscape: Why DEI Is Under Attack

Something has shifted. The acronym that once signaled organizational virtue -- DEI -- has become a political lightning rod. For nonprofit leaders who have spent years building more equitable organizations, the speed of this reversal is disorienting.

But here is the reality that too few people are saying plainly: the backlash is not really about equity. It is about a brand. "DEI" became shorthand for a set of corporate programs, many of which were performative to begin with. When the political winds shifted, those programs became easy targets precisely because they were never deeply embedded in how organizations actually operated.

The organizations that will navigate this moment successfully are not the ones debating whether to keep the acronym. They are the ones who built equity into the foundation of their work -- into their strategic plans, their governance, their talent pipelines, and their impact measurement. For those organizations, this moment is uncomfortable but not existential.

For everyone else, this is a wake-up call. And it is also an opportunity.

The Political and Legal Shifts (2024-2026)

The ground shifted dramatically starting in June 2023, when the Supreme Court struck down race-conscious admissions in Students for Fair Admissions v. Harvard, eliminating race-based affirmative action in public and private higher education. While the ruling applied directly to college admissions, its legal ripple effects have been far broader, emboldening challenges to race-conscious programs across employment, contracting, and the nonprofit sector.

Then came January 2025. In his first week back in office, President Trump issued executive orders directing federal agencies to terminate DEI offices, positions, and programs across the federal government. The orders went further, targeting the private sector: they tasked agencies to "enforce our longstanding civil rights laws and to combat illegal private sector DEI preferences, mandates, policies, programs, and activities."

For nonprofits, the implications are direct and concrete. Organizations receiving federal grants, cooperative agreements, or contracts now face requirements to certify that they do not operate programs promoting DEI that violate federal anti-discrimination laws. The executive orders specifically call out "large non-profit corporations or associations" as potential targets for civil investigations by the Attorney General.

The legal landscape remains genuinely uncertain. As the American Bar Association has noted, the executive orders do little to elaborate on what they consider "discriminatory" or "illegal," creating a fog of ambiguity that can be more paralyzing than clear prohibition.

Corporate Retreat vs. Nonprofit Reality

Corporate America's response has been swift and, in many cases, dramatic. Meta terminated its DEI programs entirely in January 2025, including those involved in hiring, training, and supplier selection, eliminating its DEI team and its chief diversity officer's role. Target concluded its three-year diversity goals and REACH (Racial Equity Action and Change) initiatives, stopping participation in external diversity-focused surveys. Walmart did not renew its $100 million, five-year commitment to its Center for Racial Equity, phasing out even the description "diversity, equity and inclusion" from its communications.

The scale of the retreat is measurable. According to the Washington Post, the typical S&P 500 company mentioned DEI four times in 2024 filings, down from a peak of 12.5 mentions in 2022. Companies halved the number of DEI metrics tied to executive compensation. And NPR reported that since early 2023, U.S. employers have eliminated more than 2,600 jobs with "diversity" or "DEI" in their titles.

But here is where nonprofit leaders need to pause before following corporate America's lead: your reality is fundamentally different. Corporations adopted DEI largely as a reputational strategy. Many nonprofits pursue equity because it is inseparable from their mission. An organization serving communities affected by systemic inequity cannot simply rebrand its way out of that work. The communities you serve did not stop being underserved because the political climate changed.

The contrast is instructive. While Target and Walmart retreated, more than 98% of Costco shareholders voted down an anti-DEI proposal in January 2025, with the board unanimously defending its commitment. Costco's board stated that its "commitment to an enterprise rooted in respect and inclusion is appropriate and necessary." Apple and John Deere shareholders similarly rejected anti-DEI proposals. The lesson: organizations that anchored diversity to business fundamentals and genuine values -- rather than trend-chasing -- found their stakeholders standing with them.

What the Data Actually Shows

Amid the political noise, the evidence base for equity-centered organizational practices has not changed. What has changed is the need to be precise about what the evidence actually supports.

McKinsey's 2023 report, Diversity Matters Even More, found that companies in the top quartile for both gender and ethnic diversity on executive teams are on average 9 percent more likely to outperform their peers financially, while those in the bottom quartile for both are 66 percent less likely to outperform. It is worth noting -- and intellectually honest to acknowledge -- that McKinsey's methodology identifies correlation, not causation, and has faced academic scrutiny. But the directional signal across multiple studies is consistent: organizations that draw from broader talent pools and incorporate diverse perspectives into decision-making tend to make better decisions.

For nonprofits specifically, the talent data is stark. Nearly one in three nonprofits struggle with retention and turnover, and 59 percent reported it was significantly harder to fill staff positions in 2024 than in previous years. Organizations that abandon equity commitments risk accelerating these challenges, particularly given that women account for more than 71% of DEI professionals and Black and Hispanic workers hold 33% of DEI roles compared to 21% of other positions. Eliminating these roles sends a visible signal about organizational priorities.

The bottom line: the case for equitable organizational practices rests on mission effectiveness, talent strategy, and operational performance -- not on any acronym.

Beyond the Acronym: Why Language Matters Now

The Problem with "DEI" as a Brand

DEI became a brand in the summer of 2020. In the weeks following George Floyd's murder, corporations pledged billions, hired chief diversity officers, and published statements. The acronym became ubiquitous -- and in that ubiquity, it became something it was never meant to be: a product.

Like any brand, DEI became subject to the forces that shape all brands. It accumulated meaning beyond its original intent. It became associated not just with equity and inclusion, but with specific programmatic approaches: unconscious bias trainings, diversity statements, supplier diversity targets, affinity groups. Some of these programs were effective. Many were not. But they all became "DEI."

This made the acronym vulnerable in ways that actual equity work is not. When critics attack "DEI," they are often attacking a caricature -- mandatory trainings that feel punitive, hiring practices that seem to prioritize identity over competence, or public statements that ring hollow. The tragedy is that this caricature has little to do with the substantive work of building organizations where everyone can contribute their full capacity.

Equity vs. DEI: Understanding the Distinction

Equity is a principle. DEI is a program category. This distinction matters enormously right now.

Equity asks a foundational question: are the systems, structures, and practices of our organization producing fair outcomes? It is inherently analytical. It requires looking at data -- compensation data, promotion rates, service delivery outcomes, community impact metrics -- and asking whether the patterns you see reflect the mission you claim.

DEI, as commonly practiced, became a set of activities: trainings, committees, hiring targets, and public commitments. These activities may or may not advance equity depending on how they are designed and implemented. Many organizations ran DEI programs for years without ever examining whether their core operations were producing equitable outcomes.

This is why the current backlash, painful as it is, contains a genuine opportunity. Organizations that were doing performative DEI -- checking boxes without changing systems -- are being forced to reckon with that gap. Organizations that embedded equity into their strategic plans, governance structures, and operational decisions are discovering that their work is far more durable than any acronym.

For a deeper look at how equity principles should drive organizational strategy, see our guide on equity-centered strategic planning for nonprofits.

Reframing Without Retreating

The question many nonprofit leaders are asking right now is: "Should we change our language?" The answer is nuanced: change your language if doing so makes your work more effective, not because you are afraid.

Some organizations are finding that different language opens doors that "DEI" now closes. Nationwide replaced DEI terminology with "Belonging, Respect and Fairness". Kohl's retitled its Chief DEI Officer to Chief Inclusion and Belonging Officer. Racial equity strategist Lily Zheng has developed what she calls the FAIR framework -- Fairness, Accessibility, Inclusion, and Representation -- designed to achieve equity goals without triggering the legal and political tripwires now attached to the DEI label.

The key test for any reframe is simple: does the new language let you do the same work, or does it give you permission to do less? If your "belonging and inclusion" initiative drops the equity analysis, the outcome tracking, and the structural changes that equity requires, then you have not reframed -- you have retreated. If, on the other hand, new language helps you build broader coalitions, engage resistant stakeholders, and protect funding streams while maintaining the substance of your work, then strategic reframing is smart leadership.

At Giddings Consulting Group, we help organizations navigate this exact tension -- finding language that builds bridges without burning the substance of the work.

Five Pillars of an Equity Strategy That Survives Backlash

Surviving the current moment requires more than new language. It requires an equity strategy that is structurally embedded, mission-aligned, and resilient to political cycles. Here are the five pillars we see in organizations that are navigating this well.

1. Anchor to Mission, Not Trends

The organizations most vulnerable right now are those whose equity work was trend-driven -- adopted in 2020 because it was expected, not because it was essential. The organizations most resilient are those that can draw a straight line from their equity practices to their mission.

This is not abstract. It means being able to answer, concretely: "How does our commitment to equitable practices make us more effective at achieving our mission?" If you serve a community where 60 percent of residents are people of color, having leadership that reflects that community is not a DEI initiative -- it is a strategic imperative for trust, understanding, and effective service delivery.

Anchoring to mission also provides legal and political protection. The American Bar Association's analysis of the current executive orders makes clear that the legal risk concentrates around race-conscious decision-making that could be characterized as discriminatory -- not around mission-aligned practices that serve the entire community equitably.

Action step: Conduct a "mission alignment audit" of every equity-related practice in your organization. For each one, articulate the direct connection to mission effectiveness. Practices that lack a clear mission connection are both less defensible and less valuable. Practices with strong mission alignment should be expanded and highlighted.

For more on aligning strategy with mission, see our piece on the state of strategic planning in social impact for 2026.

2. Embed Equity in Strategic Planning (Not a Separate Initiative)

One of the most common -- and most dangerous -- organizational patterns of the last five years was treating DEI as a parallel track. The strategic plan addressed programs, finances, and growth. The DEI plan addressed representation, training, and culture. The two rarely intersected in meaningful ways.

This separation made equity work easy to cut. When budgets tighten or political pressure mounts, anything that looks like an add-on is the first to go. But equity that is woven into your strategic plan -- into how you design programs, allocate resources, evaluate impact, and develop leaders -- cannot be excised without dismantling the plan itself.

What this looks like in practice:

Program design: Every new program includes an equity analysis as part of the design phase, examining who benefits, who is excluded, and what barriers to access exist

Resource allocation: Budget decisions include analysis of how resources flow across the communities you serve, with attention to historical patterns of underinvestment

Performance metrics: Your dashboard includes equity indicators alongside traditional measures of efficiency and scale

Talent development: Your leadership pipeline strategy addresses the specific barriers that have historically prevented diverse leaders from advancing in your organization

This is the approach we detail in our equity-centered strategic planning guide -- not equity as a sidebar, but equity as a lens through which all strategy is developed and evaluated.

3. Build Board Alignment and Governance Frameworks

Nothing undermines equity work faster than a divided board. And in the current environment, board alignment is actively under pressure. Board members read the same headlines as everyone else. Some are hearing from colleagues in the corporate sector that DEI is "over." Others are doubling down. Without proactive governance frameworks, these tensions can paralyze organizational leadership at exactly the moment when clear direction is needed.

Effective board governance around equity requires three things:

Shared understanding of legal obligations and risks. Board members need accurate, non-politicized information about what the executive orders actually require, what the legal risks actually are, and what the difference is between compliance and capitulation. Many boards are operating on fear-based assumptions that exceed the actual legal exposure.

Clear connection between equity commitments and fiduciary duty. Board members have a fiduciary obligation to the organization's mission. If equity practices are demonstrably connected to mission effectiveness -- as they should be -- then the board's fiduciary duty supports, rather than conflicts with, those practices.

A governance framework for navigating external pressure. This includes clear policies about how the organization responds to political pressure, who speaks on behalf of the organization, and how decisions about programmatic changes are made. Ad hoc responses to external pressure almost always result in overcorrection.

The share of new Russell 3000 directors who are non-white dropped from 48% in 2022 to 31% in 2024, and the share of new directors who are Black fell from 26% to 12%. This retreat in board diversity will have cascading effects on governance quality, stakeholder representation, and organizational decision-making for years to come.

For a comprehensive approach to governance in this environment, see our resource on nonprofit board development best practices.

4. Redesign Impact Measurement for the New Reality

Here is a practical truth: if you cannot measure the impact of your equity work, you cannot defend it. And if you can only measure it using the language and frameworks of the 2020 DEI era, you are making it harder to defend than it needs to be.

The most resilient organizations are redesigning their impact measurement to be simultaneously more rigorous and more strategically communicated. This means:

Disaggregating data by default. Rather than asking "did our program work?" ask "did our program work equitably across the populations we serve?" Disaggregated outcome data is both better evaluation practice and a powerful equity tool -- and it is framed as quality improvement, not DEI.

Measuring structural change, not just programmatic activity. Instead of tracking the number of diversity trainings held, track the changes in hiring outcomes, promotion rates, compensation equity, and service delivery patterns that result from structural changes to how you operate.

Building evidence bases that speak to multiple audiences. Your equity data should be communicable to funders who want to see equity metrics, to board members who want to see mission effectiveness, and to stakeholders who may be skeptical of DEI framing. The same data, framed differently, serves all three audiences.

Our framework for measuring social impact provides a detailed approach to building measurement systems that capture equity outcomes without being reducible to any single political framing.

5. Protect and Retain Diverse Talent Through Turbulence

The human cost of the current moment is real and measurable. The elimination of over 2,600 DEI-related positions disproportionately affects women, Black, and Hispanic professionals who were concentrated in these roles. Beyond the direct job losses, the broader signal -- that organizations are pulling back from diversity commitments -- creates a chilling effect on retention across the board.

For nonprofits already struggling with retention -- with 55% citing inability to offer competitive salaries as a significant challenge -- losing diverse talent because of a failure to maintain inclusive culture is an avoidable crisis.

Organizations that retain talent through this turbulence are doing several things differently:

Communicating proactively with staff. Rather than letting employees wonder whether the organization's commitments have changed, leadership addresses the current environment directly and reaffirms core values with specific, actionable commitments -- not just statements.

Investing in management capacity. The daily experience of inclusion is shaped more by direct managers than by organizational DEI programs. Investing in managers' capacity to lead equitably -- through coaching, feedback systems, and accountability structures -- builds inclusive culture that is independent of any political climate.

Maintaining development pathways. The nonprofit leadership pipeline crisis has been growing for decades, with particular barriers for leaders of color around mentorship and sponsorship. Organizations that maintain robust development pathways are making a long-term strategic investment that will pay dividends when the talent market tightens further.

Watching for culture erosion. In environments of external pressure, organizational culture can erode quickly and quietly. Anonymous pulse surveys, exit interview analysis, and regular check-ins with employee resource groups (by whatever name) provide early warning signals.

For a deeper dive into talent strategy, see our piece on retaining nonprofit talent through proven practices.

A Practical Framework: The Equity Strategy Audit

Moving from reaction to strategy requires a structured assessment of where your organization actually stands. We recommend what we call the Equity Strategy Audit -- a systematic review that helps leaders understand their current position, identify vulnerabilities, and build a credible action plan.

Assessing Your Current Position

The audit begins with an honest assessment across four dimensions:

1. Mission Integration

• To what extent are equity principles embedded in your strategic plan versus treated as a separate initiative?
• Can you articulate the mission case for every equity-related practice in your organization?
• Have you recently reviewed your mission statement and theory of change through an equity lens?

2. Structural Embedding

• Are equity considerations built into your standard operating procedures -- hiring, promotion, program design, resource allocation -- or do they exist only as overlays?
• If you eliminated every position with "diversity" or "equity" in the title, would your equitable practices continue? If not, your equity work is person-dependent, not system-dependent.

3. Measurement and Evidence

• Can you demonstrate, with data, that your equity practices improve organizational outcomes?
• Do you disaggregate outcome data to identify disparities in service delivery or internal operations?
• Is your impact measurement framework robust enough to communicate to skeptical stakeholders?

4. Governance and Leadership

• Is your board aligned on the organization's equity commitments? Do board members understand the legal landscape accurately?
• Does your leadership team have the capacity to navigate external pressure without overcorrecting?
• Do you have a communications framework for addressing equity-related inquiries from funders, media, and stakeholders?

Stakeholder Mapping and Risk Analysis

Not all stakeholders will respond to the current environment the same way. A stakeholder mapping exercise identifies:

Champions: Stakeholders who actively support your equity work and can amplify your message

Allies: Stakeholders who support your work but may need reassurance or updated framing

Persuadables: Stakeholders who are uncertain and whose position may depend on how you communicate

Opponents: Stakeholders who are actively pressuring you to retreat

For each group, develop a tailored engagement strategy. Champions need to be activated. Allies need to be informed. Persuadables need evidence and mission-aligned framing. Opponents need clear boundaries.

The risk analysis component examines:

Funding exposure: What percentage of your revenue comes from sources that are actively pulling back from equity commitments? What is your diversification strategy?

Legal exposure: Based on your actual practices (not your fears), what is your realistic legal risk profile? Most organizations overestimate this.

Reputational exposure: Who are you more likely to lose -- stakeholders who want you to retreat, or stakeholders who will lose trust if you do?

The 90-Day Action Plan

A 90-day action plan translates assessment into movement:

Days 1-30: Stabilize

• Conduct the internal assessment described above
• Brief the board on the actual legal landscape (not the headline version)
• Issue an internal communication to staff affirming organizational values with specific commitments
• Review all public-facing language for unnecessary vulnerability -- not to retreat, but to ensure your communications are precise and defensible

Days 31-60: Strengthen

• Integrate equity metrics into your existing strategic plan if they are not already there
• Develop a stakeholder communication framework with tailored messaging for different audiences
• Assess your funding diversification and begin outreach to values-aligned funders
• Invest in management training on inclusive leadership practices

Days 61-90: Advance

• Launch redesigned impact measurement that captures equity outcomes within a broader effectiveness framework
• Publish your organizational position -- not a defensive statement, but a proactive articulation of how your mission-aligned practices drive results
• Begin board development around governance in politically charged environments
• Identify strategic partnerships with peer organizations for shared advocacy and learning

This kind of structured strategic planning is exactly what we help organizations develop. For more context on our approach, see our guide to strategic planning for social impact in 2026.

Navigating Funder and Stakeholder Conversations

When Funders Ask About Your "DEI Strategy"

Funder conversations about equity are becoming more complex. Some funders are doubling down on equity requirements. Others are quietly removing DEI language from their guidelines. Some are doing both simultaneously -- maintaining equity expectations while avoiding the acronym.

Here is a framework for navigating these conversations:

If a funder asks about your DEI strategy: Respond with your equity strategy -- the substance, not the brand. Describe how equity is embedded in your program design, how you measure equitable outcomes, and how your practices drive mission effectiveness. Use whatever language the funder uses, but ensure the substance remains intact.

If a funder signals they are pulling back: Ask clarifying questions. Often, funders are responding to their own board pressure and are uncertain about what they actually want to change. Asking "Can you help me understand what specific practices concern you?" often reveals that the concern is about the label, not the work. Many funders will be relieved to hear an organization describe its equity work in terms of mission effectiveness and measurable outcomes.

If a funder explicitly requires you to certify you have no DEI programs: This requires legal counsel. The certification requirements emerging from the federal executive orders are vaguely worded, and legal experts are still interpreting their scope. Do not sign certifications without understanding exactly what you are certifying and what your actual practices are. In many cases, mission-aligned equity practices do not fall within the scope of what the orders target.

Our resource on nonprofit fundraising trends for 2026 addresses the broader shifts in the funding landscape and how organizations can position themselves effectively.

Communicating Change Without Signaling Retreat

There is a significant difference between strategic communication and capitulation, and your stakeholders -- especially your staff and the communities you serve -- can tell the difference.

Principles for effective communication:

Lead with mission, not with politics. "Our commitment to serving all members of our community equitably is central to our mission" is stronger than "Despite the current political environment, we remain committed to DEI."

Be specific, not aspirational. "We disaggregate our outcome data across all demographics to ensure equitable service delivery" is more credible than "We value diversity and inclusion."

Acknowledge the complexity without being paralyzed by it. It is acceptable to say: "We are thoughtfully navigating a changing legal and political landscape while maintaining our commitment to the communities we serve." This is honest, mature, and reassuring.

Show, do not just tell. The most powerful communication is what you actually do. If you maintain your equity practices, invest in diverse leadership, and continue measuring equitable outcomes, that communicates more than any statement.

The Organizations That Will Thrive

Why Equity-Centered Organizations Outperform

When the current political cycle passes -- and it will pass -- the organizations that maintained their commitment to equitable practices will be better positioned than those that retreated. Here is why:

Talent advantage. In a sector where nearly one in three organizations struggle with retention, the organizations that maintained inclusive cultures will have retained their best people while competitors lost them. Rebuilding a talent pipeline is far more expensive than maintaining one.

Community trust. The communities most affected by inequity are watching closely. Organizations that retreat from equity commitments will need years to rebuild trust. Organizations that maintained their commitments -- even when it was difficult -- will have deepened trust in ways that accelerate every other aspect of their work.

Funder alignment. The majority of funders continue to prioritize equitable outcomes in their grantmaking, even as language shifts. Organizations with robust equity measurement systems and demonstrated commitment will be first in line as funding priorities stabilize.

Mission effectiveness. Ultimately, this is the argument that matters most. Organizations that serve communities affected by systemic inequity cannot be effective without addressing that inequity in their own operations, programs, and outcomes. Retreating from equity does not just signal a change in values -- it reduces organizational effectiveness.

The parallel to succession planning is instructive: organizations that invest in leadership continuity before a crisis are always better positioned than those that scramble in the moment. The same principle applies here. Investing in equity infrastructure now -- when it requires courage -- positions your organization for a future where that infrastructure is essential.

Next Steps: Moving From Reaction to Strategy

The organizations that navigate this moment well will share three characteristics: they will be mission-anchored, strategically rigorous, and courageous without being reckless. They will distinguish between the brand (DEI) and the substance (equity). They will change their language when doing so serves their mission and hold their ground when retreating would undermine it.

This is not easy work. It requires the kind of strategic clarity that does not emerge from fear or from ideology, but from disciplined thinking about what your organization exists to do and what it takes to do it well.

Here is what we recommend as your immediate next steps:

Get an honest assessment. Conduct the Equity Strategy Audit outlined above, or bring in outside perspective to help you see what internal dynamics may obscure.

Brief your board. Ensure your board has accurate information about the legal landscape, your organization's actual exposure, and the strategic case for your equity commitments. Fear-based decision-making at the governance level is the single greatest risk most nonprofits face right now.

Talk to your team. Your staff is watching. Silence in this moment communicates more than you think. Be honest about the challenges, specific about your commitments, and clear about the path forward.

Invest in your strategy. This is not the time to cut the strategic planning and capacity-building work that makes equity durable. It is the time to strengthen it.

Find your partners. No organization navigates a moment like this alone. Align with peer organizations, trusted advisors, and strategic partners who share your commitment and can help you think clearly under pressure.

At Giddings Consulting Group, we work with nonprofit leaders and boards to build equity strategies that are mission-aligned, legally sound, and resilient to political cycles. We do not do performative DEI -- we never have. We help organizations build the strategic infrastructure that makes equitable outcomes inevitable, regardless of which acronym is in fashion.

If your organization is navigating the current landscape and needs strategic clarity, we would welcome the conversation. The organizations that move from reaction to strategy now will define what effective social impact looks like for the next decade.