The remarkable and rapid capitulation of many corporations to the new administration’s anti-Diversity, Equity, and Inclusion (DEI) crusade is not just craven, it’s likely to impede the performance (and profitability) of these companies. Late last week, Target became the latest in a long line of corporations – following McDonald’s, Walmart, Meta and others – to roll back its DEI programs.
Contrary to the current backlash narrative, DEI done right broadens applicant pools for jobs and increases the engagement, satisfaction, and productivity of those who are hired. To those who see DEI efforts as somehow in opposition to “merit,” as so many of the anti-DEI evangelists seem to, the fact is that smart DEI programs increase the level of merit of those who are hired, or promoted, not the opposite. Put simply, DEI isn’t just some moral cause; it’s also the smart thing to do if what you care about is effectiveness.
Yet, with notable exceptions – such as Costco, Apple, Microsoft, and a few others – rare are the large companies that have had the courage to both maintain and publicly defend their DEI programs, a chilling illustration of the degree to which the early days of the second Trump Administration have succeeded in sowing fear and deference.
In this context, the voices of foundation and nonprofit leaders are all the more crucial, notwithstanding whatever understandable concerns they may have about the risks of speaking out. I hope that private foundations with a commitment to DEI, in particular, will stand strong; after all, they enjoy freedoms – including a freedom from the pressures of fundraising – that other nonprofits don’t.
What DEI Actually Means and How It Strengthens Performance
Now is the time for leaders to explain what their DEI programs are all about instead of conceding ground on programs that are morally right, lead to stronger performance, and are fully lawful. A few days ago, House Minority Leader Hakeem Jeffries offered up a strong defense of DEI as rooted in American values – or at least its aspirational values. This is important. But I want to talk about what it means for employers, and why leaders who care about results will continue to prioritize it.
Let’s go letter by letter. Seeking diversity in hiring processes increases the chances of finding the strongest candidates. By ensuring that a job posting reaches the broadest number of potential candidates, and by broadcasting that your organization values diversity, you inevitably strengthen and, yes, diversify, your candidate pool and your employee base. This is nothing but a good thing. We know that diverse groups make better decisions: this has been clearly established in business literature. Likewise, in our work at CEP, we have seen a correlation, for example, between the racial diversity of foundation boards and certain practices, such as selection processes focused on reaching overlooked communities.
Prioritizing equity means taking the necessary steps to ensure, for instance, that you don’t have pay (or benefits) disparities for comparable work that are not justified by legitimate considerations like skills and level of experience. Often, but not always, these pay differentials have a racial or gender component. Regardless of the cause, a focus on equity involves ensuring that rates of pay are based on legitimate differentials and not in-group out-group dynamics, bias, or other illegitimate criteria. Rooting out unsupportable pay differentials promotes fairness and should not be controversial.
Equity sometimes also refers to removing barriers so that disabled employees are able to fully and effectively perform the essential functions of their jobs. Aren’t we all in favor of that, and isn’t that what the law requires in any event?
Inclusion is about creating the conditions in which each employee can rise to their highest potential; research shows that a feeling of belonging correlates with higher performance. “Inclusion,” according to scholars who have studied these efforts, “creates the conditions in which everyone can thrive and where our differences as varied, multidimensional people are not only tolerated but also valued.”
“A willingness to pursue the benefits of DEI — the full participation and fair treatment of all team members — renders organizational wholes greater than the sum of their parts,” these scholars continued in a New York Times op ed headlined “Critics of DEI Forget That It Works.”
DEI Efforts Are Legal
Some worry about the legal implications of DEI efforts now that the Trump Administration is using the language of the law to try to demonize and scare employers away from these practices. But, as employment lawyer Paul Buchanan (yes relation – he’s my brother), wrote on LinkedIn a few days ago, in response to the recent executive orders on DEI:
It has always (at least in most of our adult lives) been unlawful to base hiring decisions on an individual’s race, gender, or other legally protected characteristic. That continues to be the case. It also continues to be the case that taking affirmative steps to ensure a broad and diverse applicant pool is a lawful and good thing to do, as is making sure that employees who don’t fit your most common profile (say, women, for example, in a very male dominated workforce) are supported and able to thrive.
He goes on to acknowledge what we all know: “It has also always been the case that there are positive and helpful diversity trainings, and there are horrible ham-handed and harmful trainings. And it continues to be important to know the difference.”
It’s no doubt true that, especially in the immediate wake of the racial justice reckoning of 2020, some employers – including some nonprofits – embraced trainings intended to foster inclusion that backfired. Some of those efforts simplistically equated race and culture in ways that were not just unhelpful, but also offensive and inaccurate. Others engendered so much defensiveness that the trainings had the opposite of the intended effect.
But the fact that DEI can be done poorly is no more reason to ditch it than it would be to ditch, say, training staff in how to be good at customer or client service – which, like anything, can also be done well or poorly. Some are looking to re-brand DEI with a new name in order to avoid alienating audiences that are being swayed by the Trump Administration’s narrative and scare tactics. But this is unlikely to work. Different, new language will also be seized upon, distorted, and weaponized – mark my words.
Better to stand up for what’s right. Diversity. Equity. Inclusion. These are strong and powerful words. They are not offensive or unlawful. And they can help drive stronger organizational effectiveness, goal achievement, and employee satisfaction – unleashing a virtuous cycle. There is no reason to run from them.
Refusing To Be Intimidated
I hope employers speak out for what’s right and refuse to be cowed. Because, make no mistake, intimidation is the goal of these anti-DEI proclamations. The battle is happening right now. Nonprofit and foundation leaders that care about DEI need to join it.
And some leaders are doing just that. I am impressed and inspired by the consistent, powerful voices of leaders at influential national nonprofit organizations that prioritize DEI, like (to name just a few) Bridgespan, Grantmakers for Effective Organizations (GEO), the Institute for Nonprofit Practice (on whose board I serve), and PolicyLink. A myriad of community-based organizations are also unwavering in their commitment to DEI.
I’m also grateful to the influential national foundations – like Ford, Kellogg, Kresge, Robert Wood Johnson Foundation (RWJF), Surdna and others – whose commitment to DEI appears to be rock solid. “It is unconscionable that the Trump Administration would co-opt the language and vision of the civil rights movement in these executive orders as it attempts to send our nation back to an era of rampant, state-sanctioned discrimination,” RWJF President Richard Besser said in a statement late last week.
A number of regional foundations have similarly shown resolve. Thoughtful funders are making grants to support organizations prioritizing equity and they’re also supporting their grantees, who often lack the same access to legal and other resources that foundations enjoy, to protect themselves from politicized attacks.
But I worry these will be the exceptions. “Corporations and higher ed are backtracking on DEI,” the Chronicle of Philanthropy noted in the headline to a recent article. “Will foundations fold?,” the headline asks.
This is, indeed, the crucial question. It’s essential to stand firm in the face of those who are seeking to intimidate us from doing what is right and just and, more than that, to speak out and speak up. We must do so for the sake of our country, for the sake of our core values (the very ones so many of us touted widely in 2020), and for the sake of excellence and effectiveness.
Phil Buchanan is president of the Center for Effective Philanthropy, author of the 2019 book Giving Done Right: Effective Philanthropy and Making Every Dollar Count, and co-host of the Giving Done Right podcast.
Author’s note: Thanks to the members of CEP’s Board and staff who offered their feedback on earlier drafts of this post. Thanks also to my friend and Harvard Business School professor Nancy Koehn, and my brother, Paul Buchanan, for their suggested edits and ideas, which strengthened this piece. All that said, I am solely responsible for these perspectives, which may not entirely reflect the views even of those who provided me feedback.
