How President Trump’s Executive Order to DEI Affects Nonprofits
- Erin Hutt
- Feb 10
- 5 min read
“If your nonprofit relies on federal funding, your budget could be in jeopardy.”
With President Trump’s recent executive order rolling back Diversity, Equity, and Inclusion (DEI) initiatives, grassroots organizations must prepare for potential funding cuts, policy shifts, and increased legal scrutiny.
For nonprofits, DEI isn’t just a corporate initiative—it’s a core part of how they serve communities. But with these new restrictions, organizations now face pressing questions:
Will federal grants that support DEI-related programs be impacted?
How can nonprofits uphold their DEI commitments without legal risks?
What alternative funding sources can organizations explore to stay financially stable?
While the full effects of this order are still unfolding, nonprofits that act now—by reassessing their funding, strengthening advocacy, and reinforcing their values—will be in a stronger position to weather the changes.
This post breaks down what the executive order does, how it could impact your nonprofit, and actionable steps to adapt.
Understanding the Executive Order: What Changed?
This executive order cuts funding, restricts DEI programs, and limits workplace policies for organizations that receive federal funding. While every nonprofit will be affected differently, here are the key areas of concern:
Federal grants and contracts can no longer support DEI initiatives: Programs centered around equity, anti-racism, or targeted workforce development may no longer qualify for federal funds.
New DEI hiring and training restrictions: Nonprofits with diversity-focused hiring policies or DEI training requirements may face legal and financial challenges.
Ripple effects on private donors and corporations: Some corporate funders follow federal policies. If DEI becomes politically charged, certain donors may reduce or redirect their giving.
This order doesn’t eliminate DEI work—it just changes how organizations must approach it. Nonprofits that rely on federal grants should start evaluating their risks now.
The Financial Impact: Funding Sources at Risk
Funding is already challenging for grassroots organizations, and this executive order adds more uncertainty. Here’s what nonprofit leaders need to focus on:
Government Grants & Contracts
If your nonprofit receives federal grants for workforce development, education, or community-building programs that prioritize marginalized groups, this funding could be at risk. While existing grants may not be immediately revoked, renewals and new applications may face stricter guidelines.
What to do now:
Review existing grants for DEI-related funding risks.
Reach out to grant officers to assess potential policy changes.
Identify alternative funding sources to reduce reliance on federal dollars.
Corporate & Foundation Giving
While many private funders still prioritize DEI, some may shift their strategies due to federal policy changes. Corporate donors, especially those with government contracts, may scale back support for DEI initiatives to avoid political scrutiny.
✔ Example: After Florida passed laws restricting DEI in education, several corporate sponsors pulled funding from university-led diversity programs.
What to do now:
Strengthen relationships with long-term DEI funders.
Monitor corporate giving trends and adjust strategies as needed.
Diversify funding to avoid over-reliance on a few donors.
Community Donations & Grassroots Fundraising
The good news? Federal policies do not restrict individual donors. In fact, this shift may motivate more supporters to contribute. Now is the time to focus on community-driven fundraising.
Use these strategies:
Annual campaigns to build a strong donor base.
Crowdfunding & peer-to-peer fundraising to reach new supporters.
Matching gifts & recurring donations for long-term stability.
Organizations that act now to diversify funding will be better positioned to sustain their work.
Revisiting Internal DEI Policies & Practices
Even with political pressure, nonprofits don’t have to abandon their commitment to diversity, equity, and inclusion. DEI is about more than government funding—it’s about creating fair, inclusive spaces for staff, volunteers, and the communities you serve. This executive order might limit certain policies, but it doesn’t erase the values that drive your work.
Here’s how nonprofits can move forward:
Stay True to Your Mission
If DEI has always been a part of your organization’s values, don’t let this policy shift change that. Your nonprofit can still prioritize equity in hiring, programming, and community outreach, even if federal funding is no longer an option. This is a moment to reaffirm your commitment, not retreat from it.
What to do now:
Review your organization’s mission statement and ensure it reflects your values.
Communicate with your board, staff, and donors about how you’ll continue advancing equity.
Update internal messaging to reinforce that DEI remains a priority.
Conduct a DEI Audit
Now is a good time to take a fresh look at your DEI policies and practices. Assess whether any changes need to be made to comply with the executive order while still keeping equity at the center of your work.
What to do now:
Review hiring policies, training programs, and workplace culture.
Identify areas that may be affected by federal restrictions and look for alternative approaches.
Gather feedback from staff and community members to ensure DEI efforts remain effective.
Know the Legal Boundaries
While this order creates barriers, it does not make DEI work illegal. Nonprofits still have the right to promote equity in ways that align with their missions, as long as they stay within legal guidelines. Understanding what’s still allowed can help organizations continue their work without unnecessary fear.
What to do now:
Consult legal experts to clarify what aspects of DEI may be impacted.
Ensure compliance while finding creative ways to uphold DEI values.
Stay informed on policy updates and be ready to adapt if needed.
Many nonprofits were built on the idea of driving social change. That mission doesn’t stop just because policies shift. By staying informed and committed, organizations can keep pushing for equity, even in a more challenging political climate.
Advocacy & Community Engagement in a Changing Landscape
Even with new restrictions, nonprofits can and should continue advocating for equity. The key is to focus on community-driven efforts that don’t rely on government funding.
Educate & Mobilize
Help your community understand what’s happening and why it matters. Clear, fact-based messaging keeps supporters engaged.
✔ Host discussions with donors, staff, and volunteers.
✔ Share impact stories to highlight why DEI efforts are essential.
Strengthen Coalitions
Partnerships amplify your voice. Align with other nonprofits, local businesses, and community leaders to push for equity-driven initiatives.
✔ Join nonprofit alliances focused on social justice.
✔ Collaborate on campaigns that promote inclusion.
Engage in Local Advocacy
Federal policy may shift, but local governments and private donors still have influence. Grassroots advocacy is a powerful tool.
✔ Encourage supporters to contact local officials.
✔ Apply for funding from private foundations that prioritize equity.
Nonprofits have always led the charge for social change. Now is the time to double down on that mission.
Navigating the Path Forward: Actionable Steps for Nonprofits
With DEI funding under scrutiny, nonprofits need a clear strategy.
Here’s how to stay ahead:
Assess Your Risks
Understand how this order affects your funding and programs.
✔ Review existing grants and contracts.
✔ Identify federal funding risks and explore alternatives.
Diversify Revenue Streams
Strengthen financial stability through community-driven support.
✔ Expand grassroots fundraising with annual campaigns and recurring gifts.
✔ Apply for grants from private foundations committed to DEI.
Keep Donors & Supporters Engaged
Transparency builds trust. Keep stakeholders informed.
✔ Clearly communicate how your nonprofit is adapting.
✔ Offer multiple ways for supporters to contribute—donations, advocacy, and volunteering.
This is a moment for strategy, not panic. Nonprofits that take proactive steps now will be in a stronger position moving forward.
Conclusion: Staying Resilient in Uncertain Times
Nonprofits have always adapted to political shifts, and this is no different. While this executive order presents real challenges, it does not define the future of DEI work. Organizations that prioritize financial stability, advocacy, and mission-driven programming will continue to make an impact.
It’s important to note that while this post is based on facts, it is ultimately my interpretation of how this executive order could affect nonprofits. Policies evolve, and every organization’s situation is unique. Staying informed and planning ahead is key.
Let’s Talk About Your Next Steps
Navigating these changes can feel overwhelming, but you don’t have to do it alone. Let’s create a strategy to keep your programs thriving.
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