Risk Management Resources

Internal Risk Management for Foundations

In response to the ongoing changes to the legal and policy landscape, it has become increasingly important for foundations and charitable nonprofits to engage best practices for mitigating their potential legal and operational risks. We worked with outside counsel to develop helpful guidelines for Council members.

Resources:

Equal Employment Opportunity Commission Guidance on Title VII Compliance for DEI Programs

On March 19, 2025, the Equal Employment Opportunity Commission (EEOC) released two pieces of guidance addressing “unlawful discrimination related to diversity, equity, and inclusion (DEI) in the workplace.” These two documents, titled What To Do If You Experience Discrimination Related to DEI at Work and What You Should Know About DEI-Related Discrimination at Work, explain the Trump Administration’s interpretations of the nondiscrimination provisions of Title VII of the Civil Rights Act of 1964 in the context of workplace DEI initiatives, policies, programs, or practices.

In particular, the guidance emphasizes Title VII’s prohibition on discrimination against applicants or employees in the terms, conditions, or privileges of employment, including:

Hiring
Firing
Promotion
Demotion
Compensation
Fringe benefits
Exclusion from training
Exclusion from mentoring or sponsorship programs
Exclusion from fellowships
Selection for interviews (including placement on candidate slates)

It also provides that employers may not limit, segregate, or classify employees based on race, sex, or other protected characteristics in a way that affects their status or deprives them of employment opportunities, including:

Limiting membership in workplace groups, such as Employee Resource Groups (ERG) or other employee affinity groups, to certain protected groups
Separating employees into groups based on race, sex, or another protected characteristic when administering DEI or other trainings, or other privileges of employment, even if the separate groups receive the same programming content or amount of employer resources

While neither of these documents constitute regulations issued under the federal rulemaking process, both provide a better understanding of the Administration’s likely priorities for enforcement of Title VII against so-called “illegal DEI” activities. These documents should not be viewed as an exhaustive list of the potential avenues for enforcement activities, and it is unknown at this time what course of action the Administration may take with respect to perceived Title VII violations against any organization. However, employers—including tax-exempt organizations and especially foundations with more than $500 million in assets—should engage legal counsel to review their own DEI practices to ensure compliance with applicable federal and state employment laws, with a particular focus on the areas of concern outlined in this EEOC guidance.

For a more detailed analysis of the guidance provided in these two documents, we recommend Holland & Knight’s How to Run a Legally Compliant DEI Program.