Why Legal Fear Shouldn’t Drive DEI Decisions: What Leaders Need to Know

In the months since the administration of President Donald Trump issued executive orders targeting diversity, equity, and inclusion (DEI), many organizations have made drastic changes—not because the law demands it, but because of fear, misinformation, and the implied threat of legal action.

While the political climate has shifted, the legal landscape remains largely unchanged. Panic-driven rollbacks are premature, and they often do more harm than good. To learn more, NPQ interviewed a number of leading experts in the field.

The Reality of Law

Despite the executive orders targeting DEI in federal agencies and affiliated organizations, most legal protections for inclusion programs remain in place. This is true because, fundamentally, executive orders do not have the force of law. Federal laws regarding diversity, equity, and inclusion in 2025 remain largely what they were in 2024.

According to DEI communications specialist and consultant Kim Clark, “As long as the Civil Rights Act and Title VII, and other examples such as the Americans for Disabilities Act, stay intact and organizations have done an internal audit to ensure they are in compliance, then whatever they’re doing that provides diversity, equity, and inclusion as intended outcomes is completely legal.”

Nonetheless, recent executive orders could affect nonprofits that receive federal funding. According to the Nonprofit Trends and Impacts 2021-2023 report from the Urban Institute, more than one in four nonprofits—27 percent—received federal grants in 2022, while 10 percent of nonprofits received funding through federal contracts (there could be some overlap between the two categories).

Dr. Will Moreland, president of Moreland Training & Associates, explained, “There are two main executive orders [related to DEI]. The first talks about ending all radical and wasteful government DEI programs (EO 14151). That applies specifically to federal agencies. The second executive order talks about ending illegal discrimination and restoring merit-based opportunity (EO 14173). That’s where private sector and nonprofit organizations may be impacted.”

As a consultant, Moreland partners with organizations to drive meaningful change through civility, diversity, inclusion, respect, and fairness. He notes that while nonprofits receiving federal grants may be impacted, this doesn’t mean they need to dismantle programs or fire employees.

Despite the executive orders targeting DEI in federal agencies and affiliated organizations, most legal protections for inclusion programs remain in place.

Other risks are more reputational or structural. Jad-Évangelo Nasser, a global inclusion and cross-cultural specialist, explained, “The real risk lies in potential funding cuts, contract losses, and reputational damage for organizations that publicly resist.” But, he adds, scaling back DEI efforts carries its own set of risks; this can include weakening talent pipelines, as well as “stifling innovation and long-term workforce diversity, which are critical for global market competitiveness.”

Moreland urges strategic thinking over panic. “The main thing is to not overreact,” he said. “Every private sector and nonprofit needs to take a step back, get with their legal teams, and pore through the executive orders. See what the executive order is saying and what it is not saying.”

Resistance Makes Gains

Executive orders may make splashy headlines, but they don’t automatically change the law. Legal challenges to the orders are already underway, and some are succeeding. In April 2025, a federal judge ruled that a key DEI-related provision was too vague to enforce and likely violated free speech protections.

Moreland notes that the term “DEI” is easier to weaponize than the values it represents. Diversity, equity, and inclusion don’t have a fixed legal definition, but it is clear that programs built around DEI principles are often very much aligned with merit-based hiring.

“The complication is that people are saying DEI gives unqualified people an opportunity,” Moreland explains. “That’s not what DEI is. DEI gives a qualified person an opportunity they wouldn’t normally have.”

Civil rights attorney Jill Habig, founder and CEO of Public Rights Project, reinforced the point: “Anything that was lawful on January 19 is still lawful.”

Don’t Act Out of Fear

Legal and communications experts agree that now is a moment for clarity and strategy, not panic. Clark advises starting with a baseline check. She encourages nonprofits to “run an audit of their DEI strategy and goals to ensure they are abiding by current anti-discrimination laws.” With this foundation in place, organizations can make informed decisions that protect both their people and their mission.

“What I am seeing happening in response to the [executive orders] suggesting anti-DEI directives is like what we saw in disruptive workplace moments like #TimesUp and #BlackLivesMatter,” said Michael Chamberlain, a consultant and strategic advisor on DEI. “I am seeing this chilling effect…[that] labels anything DEI as ‘temporarily toxic’ or at the very least ‘handle with extreme care.’”

Leaders must return to fundamentals, defining what they stand for, measuring progress, and communicating their values clearly and consistently.

That chilling effect is dangerous, especially when it leads to reactive decisions that undermine organizational values. Bo Breuklander, principal of Breuklander Communications, urges leaders to keep perspective. “Politics shift every four years, but your people will always be your people,” he noted. “Your stakeholders won’t change. Stand by your purpose….If DEI was important to you before, it means it’s because it’s a part of your culture, and your audiences and employees appreciate it and feel like they belong with you.”

Short-term fear, Breuklander says, shouldn’t outweigh long-term values. When DEI is genuinely part of your culture, reflected in hiring practices, accessibility, and inclusion, it’s more than a policy trend. That’s where the focus should remain.

The prevalent sense of legal risk is shaped more by political messaging than by legal reality. This perception, according to Clark, is a “PR power play void of any evidence or context.”

Habig agrees, emphasizing that the real goal of the executive orders is fear-based compliance, not actual legal enforcement. Leaders who abandon DEI allow the federal government to strip away valuable programs and initiatives without ever changing a law.

How to Avoid Self-Sabotage

Even though no new laws have been passed, that doesn’t mean every DEI program is automatically protected. Experts recommend legal audits and thoughtful assessments, not overcorrections.

Nasser underscores the importance of aligning DEI with long-term strategy. “Ultimately, organizations must conduct legal risk assessments, align DEI with business objectives, and prioritize cultural intelligence,” he said. “Businesses that abandon DEI will struggle to sustain growth, innovation, and global market relevance.”

Chamberlain recommends evaluating every initiative to ensure it promotes access, avoids identity-based favoritism, and truly builds an inclusive culture. He emphasizes embedding DEI in daily actions and inclusive leadership behaviors, such as mentoring, coaching, and championing work-life policies. In his words, “The micro-actions can have a tremendous impact and could maintain a commitment to cultures of inclusion without formal DEI programs in place.”

That’s why leaders should double down on clarity and consistency. Reaffirming inclusive values, conducting legal audits, and strengthening day-to-day practices can reinforce a culture of belonging, even amid political pressure. When rooted in long-term strategy and thoughtful design, DEI drives performance, strengthens the workforce, and sustains impact.

Lead with Purpose

As organizations navigate legal ambiguity and political pressure, leaders must return to fundamentals, defining what they stand for, measuring progress, and communicating their values clearly and consistently.

“I would challenge every company to go back to its mission and vision statements. Ask yourself, who do we want to be?” said Moreland. “No company that wants to last will be able to do so without a diverse workforce. Your workforce has to mirror the people you serve.”

“Employees need to hear and see that leadership values diversity and is actively working to create workplaces where everyone feels a sense of belonging.”

One critical part of that clarity, said Michael Shmarak—a communications strategist focused partly on DEI, ESG (environmental, social, and governance framework), and other forms of corporate responsibility—is understanding the real purpose behind your DEI efforts: “It’s one thing if an organization is going to use DEI as the flavor of the month communication, then they shouldn’t be involved in DEI. It means that they’re not measuring what’s truly important.”

Intention alone isn’t enough; leaders also need to make DEI work visible and measurable. Failing to do so, Shmarak warns, can weaken credibility and open the door to attacks.

“If you go back and look at some of these activist groups, like Robby Starbuck, who’s telling companies to get rid of DEI,” Shmarak noted, “the reason why they’ve gone after these companies is that the companies didn’t go far enough to make DEI visual and measurable. They didn’t make stakeholders appreciate what the value was.”

He believes the anti-DEI side is “winning the communications war.” His advice to nonprofits? “Create measurements that matter to your organization. Make sure they are properly qualified and quantified—and share those results. Double down on messaging about what DEI really is, what it really creates, the reason why it was formed, and how [the] nonprofit is using it not only for their benefit but for others.”

Ralinda Watts, a DEI consultant focused on race, identity, and justice, emphasizes that this level of commitment and transparency must come from the top. “Senior leaders and boards must be vocal and unwavering in their commitment to DEI. It’s not enough to quietly support these initiatives behind closed doors—employees need to hear and see that leadership values diversity and is actively working to create workplaces where everyone feels a sense of belonging,” she said.

“This kind of transparency and accountability ensures DEI remains a priority, even in the face of external pressures,” Watts added. “Leaders need to act with conviction.”

Staying the Course

Abandoning DEI puts organizations at risk of falling behind in talent, innovation, and global relevance. The threat may feel urgent, but the bigger risk is retreating from what works. As Breuklander put it, “Scaling back diversity is bad for business. Your people want to feel like you care about them.”

Other experts agree that now is the time to fortify, not abandon, what works, both from a justice and belonging perspective and from a business perspective. Nasser noted, “The financial benefits of DEI remain undeniable. Political and legal pressures should not deter businesses.…Organizations should integrate DEI into core business strategies rather than treat it as a standalone initiative.”

Shmarak offered the reminder that “DEI is a long game at this point.” Organizations that stay focused on what works will be better positioned for whatever comes next.