In the wake of President Donald Trump issuing a flurry of executive orders in January that gutted funding for federal programs focused on diversity, equity and inclusion – a.k.a., the acronym DEI – corporations, nonprofits and government agencies found themselves scrambling.

Amid the increasing hostility toward DEI, some Fortune 500 corporations held their ground. Then, there are those businesses that pared back, and in some cases, scrapped their pledges and missions related to DEI – among those in Los Angeles being The Walt Disney Co., Warner Bros. Discovery and Paramount Global, whose subsidiary Paramount Pictures is headquartered in Hollywood, as reported by the Business Journal in March.

The chaotic fallout raised questions around the philanthropic arms of companies, which generally supported DEI initiatives through foundations or other corporate giving programs. In some respects, corporate philanthropy has become nuanced as companies paused to recalibrate – that includes revisiting their philanthropic efforts and communications strategies. All that angst has led to even more brewing concern for those on the receiving end of that philanthropic giving: the nonprofits.

“There’s (been) a lot of fear and a lot of confusion” for everyone in this sector,” said Geoff Green, chief executive of the California Association of Nonprofits in San Francisco, which represents the state’s collective of nonprofits.  

Geovanny Ragsdale, president and chief executive of the Boys & Girls Club of the West Valley in Canoga Park, echoed that sentiment.

“It kind of takes me back to the start of the (Covid-19 pandemic) – the high uncertainty, high stress, constant pivoting, and then a real challenge to stop and reflect on where we stand by our values and our efforts at these moments,” she said. “Everyone is feeling the pressure.”

Record giving in 2024

The pressure weighing down on the issue of DEI and corporations this year comes as the level of giving in 2024 reached all-time highs, based on the annual report on philanthropy by GivingUSA, released in early July. Corporate giving rose 6% in 2024 after adjusting for inflation, with companies shelling out more than $44 billion to charities, the report showed.

Total giving – including corporations, individuals, bequests and foundations – reached an estimated $592.5 billion to U.S. charities, up more than 3% after inflation. Only one philanthropic area saw a drop. That was in the religion segment, which dipped by 1% last year.

“The good news is the trend has generally just been up, and even in times of recession, it flattens out,” said Green. “It doesn’t generally get very far (off track). But corporate philanthropy has also always been a very small sliver of overall revenue in the nonprofit sector. So, it’s critical in certain ways, but it’s not an overwhelming amount of the total revenue that nonprofits depend on.”

Corporate philanthropy made up less than 10% of total giving last year. Individual giving  was the largest source, at nearly $392.5 billion.

Maintaining this level of giving still will depend on several factors, most importantly on how profitable corporations remain this year, said Jeff Hoffman, The Conference Board’s interim leader of governance and sustainability.

“There are a lot of things that could impact profitability one way of the other. There are things that could be advantageous and there are things that could be (the opposite),” Hoffman said.

He added that new tax provisions within Trump’s so-called “Big Beautiful Bill” limited flexibility in giving. Companies can now only deduct philanthropic contributions that exceed 1% of their taxable income; the annual cap at 10% remains.

Then, there’s Trump’s ongoing shifts in his global trade policies – both serve as an example of “the paralysis through the chaos,” said Hoffman, who is also the Board’s institute leader of corporate citizenship and philanthropy.

“(For) one, it’s hard to plan,” said Hoffman. These have “big implications on profitability, and when companies are giving to nonprofits, it’s coming out of those profits.”

2025 Outlook

Still coming into 2025, corporate giving has been ripe for scrutiny – particularly when it comes to DEI initiatives.

The Conference Board captured the ethos of the moment in its annual survey of 121 “corporate citizenship executives” from leading U.S. and multinational companies, released earlier this year.

The survey showed that 53% of respondents expected “no tangible impact” on their budgets and other resources for the year, even with the changing political, regulatory and social circles. Yet the survey also showed that 21% anticipated seeing more requests to “demonstrate the cost efficiency of their citizenship programs,” which alluded to a rise in “scrutiny over discretionary spending and a greater need to align initiatives with core business priorities and shareholder value.”

Digging further into the survey, a segment of those surveyed said they would shift their focus – 24% planned to explore more on economic opportunity and 18% in education. At the same time, 24% of respondents planned to reduce their emphasis on racial equity initiatives and another 22% would explore lessening their focus on gender equality efforts.

The Board’s survey also highlighted the communication strategies around philanthropic programming – in that, 41% of companies were planning to increase the “frequency or intensity” of internal communications about their philanthropic efforts. Another 30% looked to boost their voice around their initiatives externally. The surveyed also showed 37% of respondents said they would revise their language and terminology used to describe their efforts both internally and externally.

Nearly half of the survey respondents, at 44%, said that concerns over political, social and legal developments served as the key factors behind the adjustments in language and communication plans, 41% said they would look at adopting more neutral language to lessen public scrutiny and 40% planned to review external communications strategies.To maintain trust among their stakeholders, companies are adopting more neutral language like “reframing DEI-related initiatives from supporting specific demographic groups to emphasizing broader themes like ‘belonging’ or ‘inclusion,’” the report said. 

Carmen Bowen, executive director of the Pacific Palisades nonprofit Proxy Parent Foundation, noticed the changing language in the mission statements of nonprofits – and she attributes it to gaining those corporate philanthropic dollars. The revisions are being set to fit a narrative. “(I’m) seeing a shift,” Bowen said. Still, as she explored in a course on the concept of implicit bias, “diversity is not only about race and gender … (diversity) is so much more than that.”

The legal ramifications

Companies overall remain diligent and cautious. They’re “evaluating, auditing (and) assessing their various initiatives and programs. They’re making sure that they’re not only legally compliant, but that they also are maintaining the culture and values of both the company, and their employees,” said Louise Truong, a partner at Mitchell Silberberg & Knupp LLP in Century City. “And I think companies are understanding that they have to keep on revisiting these policies and programs as it is likely that there will be additional guidelines from government agencies and future court cases that will be addressing these issues.”   

Many businesses, nonprofits, private foundations and others alike have sought legal guidance – especially considering the legal challenges that have arisen surrounding DEI policies before the executive orders. In 2023, the U.S. Supreme Court issued its landmark ruling that affirmative action in college admissions is unconstitutional, which opened the door for conservative organizations to target initiatives that were deemed to violate the federal civil rights law.

The executive orders at the top of the year added even more fuel to the brewing fire and raised questions among corporate-based philanthropic foundations and the like about compliance.

In short, no one wanted to be a target, said Jennifer Martinez, partner and chief diversity, equity and inclusion officer at law firm Hanson Bridgett’s Walnut Creek location.

“There’s a lot of noise, but not a lot of substantive change,” she said. “Certainly, there’s been a lot of activity from this administration. There’s been a lot of activity and threats from private organizations with a specific goal to dismantle certain things. But the substance of the law, the actual legal landscape, hasn’t changed at all.”

Martinez said her firm has worked with their clients on reviewing their messaging within various programming, ranging from tweaking “the eligibility language” for scholarships to reviewing the grant-making process. And “because the legal landscape hasn’t changed, the work we’re doing is mostly how do you avoid, number one, being a target; and number two, let your donors know that you’re still a safe organization to contribute to.”

Casey Williams, partner and chair of Westchester-based law firm Liebert Cassidy Whitmore’s nonprofit practice group, added that the foundations of the landmark Civil Rights Act of 1964 still stand – which outlawed discrimination based on race, color, sex or national origin. “A lot of this is just longstanding law and just helping organizations understand the limitations, the opportunities (that) the longstanding law provides with respect to DEI,” said Williams.

Organizations like the California Association of Nonprofits have added a webpage to its main website, featuring a variety of resources for nonprofits and potential funders on how to navigate the current political climate.

Yet the concept of DEI itself is not new, Green noted.

“It’s the latest jargon, and if you’ve lived long enough, you can see how it’s changed and reinvented itself time and time again, generation after generation, but I’m certainly one of the people who believes that if you’re going to talk about undoing DEI, you need to say the words,” he added. “So, say you are against diversity, say you are against equity and say you are against inclusion, and it sounds a little different when you say it that way.”

Mission driven

No one anticipates that corporate giving will falter. In fact, those within the philanthropic and charitable space said that those who’ve been committed to the mission behind the concept of diversity, equity and inclusion, have remained so.

In January, the board of directors for the Boys and Girls Club voted in a show of solidarity to maintain their mission and “double down on the fact that we’re not going to move away from DEI,” Ragsdale said. “Whether it’s in our programs, whether it’s in what we talk (about) and how we guide the organization, we believe that there is richness and strength in diversity. And it is necessary for there to be equity in what we do, and how we do what we do, and how we serve (our kids.)”

Green agreed and added: “Those who’ve been doing work to actually be more inclusive, to actually attend to and really want a more diverse organization, to actually build those values into the work – they’re not retreating.”