Excuse this long update but we want you to be aware of recent communication from the Trump Administration, primarily on DEI issues.

TL;DR: stay focused on creating work and program environments that treat people with differing characteristics, beliefs, experiences, and viewpoints with dignity and respect, regardless of their differences.

On July 29, the Office of U.S. Attorney General Pam Bondi released a memo titled “Guidance for Recipients of Federal Funding Regarding Unlawful Discrimination” (DOJ Memo). The Memo provides a list of practices that the federal Department of Justice (DOJ) describes as “not mandatory and intended to be practical guidance.” Their interpretation is not established law at this point, but it does provide guidance for interpreting permissible uses of federal funds from the Administration’s perspective. It also creates a framework for evaluating risks for privately funded programs, although the DOJ Memo explicitly addresses only the use of federal funds.

In addition to this DOJ Memo, on Thursday, August 7, President Trump signed a new Executive Order, “Improving Oversight of Federal Grantmaking,” which creates a process for politically appointed agency heads to approve all federal “discretionary funding” (not including entitlements, block grants, statutory formulas, or disaster relief grants). For community-based organizations, the most relevant parts are:

  • defining the role of political appointees in approving a “notice of funding opportunity”;
  • changing the Uniform Guidance to permit cancellation mid-grant; and
  • prohibiting funding that promotes “anti-American values”—including racial preferences and “illegal immigration”—and requiring all grants to be aligned with “the President’s policy priorities.”

We will continue to monitor the implications of the DOJ Memo and the Executive Order.

For a dose of more practical advice, below is a summary of the DOJ Memo. For more details see the DOJ Memo and in particular the “Best Practices” list on pages 8 and 9.

Granting Preferential Treatment Based on Protected Characteristics

In general, the DOJ Memo confirms what we already know and has long been the law. Below is an excerpt that captures the key point:

“Using race, sex, or other protected characteristics for employment, program participation, resource allocation, or other similar activities, opportunities, or benefits, is unlawful except in rare cases where such discrimination satisfies the relevant level of judicial scrutiny.
…[Furthermore]:

  • Race-based classifications are subject to strict scrutiny, requiring a compelling governmental interest and narrowly tailored means to achieve that interest.
  • Sex-based classifications are subject to heightened scrutiny, requiring an exceedingly persuasive justification and substantial relation to an important governmental objective.
  • Discrimination based on other protected characteristics, such as religion, is also evaluated under analogous standards.”

SNL comment: It is well established that using protected characteristics as the sole basis for candidate selection, contracting, and program participation is unlawful. The difference articulated in the DOJ Memo is the assumption that using such characteristics may constitute illegal discrimination and deep skepticism about the justification for programs tailored to address race or gender based inequities.

According to the DOJ Memo, Unlawful Preferential Treatment is defined as “a federally funded entity providing opportunities, benefits, or advantages to individuals or groups based on protected characteristics in a way that disadvantages other qualified persons.” Any program that treats people differently based on a protected characteristic (race, sex, religion, etc.) could be in violation of federal anti-discrimination law. To comply, the DOJ Memo states organizations should avoid practices such as maintaining any race-exclusive opportunities, such as:

  • offering scholarship funds, internships, mentorship programs, or leadership initiatives that reserve spots for specific racial groups;
  • prioritizing candidates from “underrepresented groups” for admission, hiring, or promotion if the “underrepresented groups” are determined by protected characteristics such as race; or
  • designating “safe spaces” or lounges exclusively for people of a specific racial or ethnic group.

However, per the DOJ Memo, an exception to unlawful segregation principles requires the availability of sex-separated athletic competitions and intimate spaces such as bathrooms and locker rooms that protect the privacy, safety, and equal opportunity of women and girls.

SNL Comment: While an opportunity cannot be based on a protected characteristic as a condition for participation, this does not mean all programs that target a particular community or issue and result in high participation from a particular classification, such as race or gender, is illegal. There is some nuance: the Administration expresses support for opportunities such as Historically Black Colleges and Universities, requires separate sex sports competitions, and has moved away from using an “disparate impact” analysis in other discrimination litigation contexts. Most importantly, know that there is more nuance when considering programs that rely on private funds as opposed to federal support.

Prohibited Use of Proxies for Protected Characteristics

Increased scrutiny will also be given to criteria that is ostensibly neutral but is seen as a proxy with the intent to advantage or disadvantage individuals based on protected characteristics.

For example, the DOJ Memo lists these practices as potentially problematic:

  • requiring job applicants to demonstrate “cultural competence,” “lived experience,” or “cross-cultural skills”;
  • recruiting in targeted geographic areas or institutions because of their racial or ethnic composition rather than objective criteria; or
  • requiring applicants to describe “obstacles they have overcome” or submit a “diversity statement” that ties to and advantages them based on their protected characteristics.

SNL Comment: These examples yield even more nuance. Again, the issue is whether a protected characteristic is an entry point for an opportunity (job or program), not whether a job may in fact include qualifications related to actual experience and cross-cultural understanding (such as an ability to communicate in Spanish for a particular service). Also, we’re reminded of the importance of including nondiscrimination clauses in contracts with third parties to ensure that an organization’s funds aren’t used for discriminatory practices.

Training Programs That Promote Discrimination or Hostile Environments

The Administration has significant concerns about “unlawful DEI training programs that stereotype, exclude, or disadvantage individuals based on protected characteristics or create a hostile environment through their content, structure, or implementation.” According to the DOJ Memo, organizations should avoid DEI trainings that:

  • include statements stereotyping individuals based on protected characteristics such “all white people are inherently privileged” and “toxic masculinity”;
  • require participants to separate into race-based groups, such as a “Black Faculty Caucus” or “White Ally Group”;
  • segregate resources such as study spaces, computer labs, or event venues by designating them “safe spaces” for groups of a certain protected characteristic; or
  • require program participants to identify with a specific racial or ethnic group, such as a DEI workshop series intended only for underrepresented minorities.

SNL Comment: This guidance takes aim at “check the box” practices. Stay focused on creating work and program environments that treat people with differing characteristics, beliefs, experiences, and viewpoints with dignity and respect, regardless of their differences. You may still prioritize involving persons who will benefit most from your services or perspective. At the same time, avoid creating barriers to participation based on characteristics such as race and consider ways to communicate information without endorsing unwelcome stereotypes. Also, in the employment context especially, be careful about ideological “litmus tests” for your employees and establish clear anti-retaliation procedures.

Please let us know if we can be of assistance in interpreting these statements. We will continue to track these issues and provide more resources as we are able.

New Compliance Statement

On July 24, the Department of Health and Human Services (HHS) released a new Grants Policy Statement updating terms and conditions that recipients of the Department’s grants must respect. As part of the Statement, HHS has revised the certification statement that applicants must
sign. Here’s the new language:

“By applying for or accepting federal funds from HHS, recipients certify compliance with all federal antidiscrimination laws and these requirements and that complying with those laws is a material condition of receiving federal funding streams. Recipients are responsible for ensuring subrecipients, contractors, and partners also comply.” HHS GPS (July 24, 2025) at 19.

The “anti-DEI” certification of the April version is noticeably missing, which, in relevant part, said the following:

“(i) [Applicants] do not, and will not during the term of this financial assistance award, operate any programs that advance or promote DEI [“Diversity, Equity and Inclusion”], DEIA [“Diversity, Equity, Inclusion, and Accessibility”], or discriminatory equity ideology in violation of Federal anti-discrimination laws; and

“(ii) [Applicants] do not engage in, and will not during the term of this award engage in, a discriminatory prohibited boycott.

The fact that this has been removed does not mean the Administration is backing off its opposition to federal funding being used for any DEI purposes. However, from a legal standpoint, we prefer a general reference to complying with federal anti-discrimination laws as opposed to the undefined “discriminatory equity ideology” concept.

We will continue to monitor related issues.