CBA Record September-October 2025

Threats to Nonprofits in 2025: How the Legal Community Can Respond By Bob Glaves, Executive Director, The Chicago Bar Foundation

that allows such broad conclusions. The reality is that DEI is generally used as a catch-all term to describe a variety of programs and policies. As a result, the efficacy and legal risk surrounding a par ticular DEI-labeled program depends on the program’s specifics. Legal Backdrop While recent executive orders and federal guidance are getting most of the attention right now, federal anti-discrimination laws as interpreted by the federal courts are the starting point for assessing legal compliance. The United States Supreme Court’s decision in Students for Fair Admissions, Inc. (SFFA) v. Presidents and Fellows of Harvard College et al., 600 U.S. 181 (2023), and other recent federal deci sions already were suggesting that treat ing employees or other stakeholders differently based on race, sex, or another

N onprofits in Illinois and beyond face heightened federal scrutiny for their programs around diversity, equity, and inclusion since the new administration took office in January. They also face related threats to their federal funding and other government pressure. While other legal issues are driv ing these threats beyond DEI-related issues, DEI is a central part of most of these threats. DEI is Not a Binary Framework At their core, the principles of diversity, equity, and inclusion are rooted in one of our nation’s most fundamental values: equal opportunity for all Americans. The principles of DEI and the values they reflect are an integral part of realizing a justice system that is fair, equitable, and accessible to everyone. We are guided by these strong values and principles, but where the rubber meets the road is how they are carried out. The narratives around DEI right now most often are framed in “all or nothing” terms—either some version of “DEI is the right thing to do, and it is offensive for you to question it” or “ DEI is un American and unlawful and needs to go away.” Neither binary framework is correct. The fact is that, beyond the overarching principles, there is no single definition of DEI

protected characteristic could be unlawful under anti-discrimi nation laws. Recent executive orders and federal directives have made more specific pronouncements of what the administration believes constitutes illegal discrimination in the DEI context. While some of these pronouncements have been legally ques tionable and have been put on hold by the courts, recent guid ance from the Department of Justice gives all nonprofits a better sense of what the administration believes constitutes unlawful discrimination in the DEI context. (https://www.justice.gov/ opa/pr/justice-department-releases-guidance-recipients-federal funding-regarding-unlawful) Recent DOJ DEI Guidance The two passages below from the announcement of the new DOJ guidance give a good summary of the overall federal intent: “Entities that receive federal funds, like all other entities sub ject to federal antidiscrimination laws, must ensure that their programs and activities comply with federal law and do not discriminate on the basis of race, color, national origin, sex, religion, or other protected characteristics—no matter the pro gram’s labels, objectives, or intentions.”

24 September/October 2025