Staying Mission-Aligned While Navigating Federal Grant Changes

What FEDERAL PARTNERS and Their Partners Need to Know About DEI-RELATED Programming and Language

Summary / Key Takeaways:

• New federal guidance clarifies how recipients of federal funds must structure DEI-related programs and messaging to avoid legal risk.

• Identity-based exclusions, preferences, or language can create compliance issues unless backed by clear data, public benefit, and nondiscriminatory outcomes.

• Equity-focused work remains both legal and essential, but must emphasize barriers, outcomes, and access, not protected identities alone.

• Creative agencies, consultants, legal, and compliance teams are vital allies for organizations navigating this evolving landscape.

• This article provides real-world examples, compliant language alternatives, and best practices to help you lead with clarity and confidence.

Language Is Strategy—and Risk

For mission-driven organizations, language is more than communication, it’s a reflection of values, an invitation to those most impacted, and a lever for change. However, with new federal guidance issued on July 30, 2025, organizations receiving federal funds must now reassess how they frame programs, outreach, and public messaging, especially around Diversity, Equity, Inclusion (DEI) and identity-based eligibility and language.

According to the U.S. Department of Justice (DOJ)'s Guidance for Recipients of Federal Funding Regarding Unlawful Discrimination

“Entities receiving federal funds 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 program’s labels, objectives, or intentions.”

This applies to program eligibility criteria, public materials, outreach events, trainings, and partner messaging. Even well-intentioned DEI efforts may create legal exposure if they include or exclude people based on protected characteristics, whether explicitly or through proxies.

so, What’s Changing and Why It Matters

The DOJ Memorandum clarifying Executive Order 14173 outlines risks for federal grantees. It highlights practices that may violate federal law unless they’re backed by objective data, a clear public benefit, and nondiscriminatory outcomes:

• Preferential treatment

• Identity-based targeting

• Use of protected-class “proxies”

• Segregated spaces or training

• Selection criteria that indirectly solicit protected information

While DEI-related programs are not banned, they must be designed and described with care and clarity, grounded in disparities and access barriers, not identity alone.

Action Step: Review your programs, recruitment, and training materials for any identity-based or proxy-based language. Ensure all targeting or prioritization is clearly justified by documented disparities or access gaps.

Key Risk Areas to Monitor

Area	Risks to Consider
Grant Applications	Language implying exclusion based solely on identity can trigger compliance reviews.
Public-Facing Communications	Descriptions limited to specific demographics without data-backed rationale.
Program Design	Services targeting groups without documented disparities or access barriers.
	Framing that highlights advantage by protected class, stereotypes, excludes, coerces or separates by identity.
Partner Messaging	External partners not aligning with federal guidance or compliant messaging.

What You Can Still Do, With Real-World Examples

You can continue vital equity work by shifting how it’s framed, with these effective approaches:

• Use data to identify disparities and guide resource allocation

• Target needs and access gaps, not solely identities

• Design open, inclusive programs that intentionally remove barriers

• Deliver DEI training tied to workplace culture, inclusion, and access

• Document decision-making to demonstrate fairness and compliance

Phrasing Shifts for DEI-Related Programs and Language

Instead of...	Consider Framing It As...
“Promoting DEI across all programs”	“Ensuring fair access and opportunity across all programs”
“Prioritizing marginalized populations”	"Intentionally addressing service gaps affecting underserved communities"
“Challenging systemic racism through our programming”	“Addressing disparities and increasing opportunity through community partnership and evidence-based programming”
“Financial support program program only for Black individuals and families”	"Supporting pathways to generational wealth for individuals and families, by removing barriers to financial literacy and long-term wealth creation"
“Priority enrollment for LGBTQ+ youth”	“Prioritizing youth facing barriers to education, including discrimination, housing instability, isolation, or lack of family support”

These shifts preserve your mission while aligning with legal guidance.

5 ways to Lead Mission-Aligned Work in a New Compliance Landscape

As federal guidance continue to evolve, equity-driven organizations must respond with both courage and care. The work isn’t over, it’s simply time to recalibrate and get creative! Leaders, agencies, consultants, and legal partners must move forward with aligned strategy and clarity, in order to continue to support vital missions and visions for our communities.

1. Center Outcomes Over Identity

Design with purpose, not assumptions.

• Anchor your programs in documented needs and disparities

• Avoid identity-based eligibility unless legally justified

• Show how your work improves access and opportunity for all

2. Design Inclusive, Open Access Programs

Target barriers, not demographics.

• Use objective, needs-based, or outcome-based eligibility

• Avoid exclusionary or proxy-based language

• Ensure all programs are open and transparent

3. Build Compliance Into Communication

Language = risk + strategy.

• Replace identity labels with access-oriented language

• Ground your messaging in data, not assumption

• Partner with legal and comms experts for messaging reviews

4. Equip and Train Your Team

Compliance is a cultural mindset shift.

• Align DEI training with inclusion, not division

• Avoid stereotyping, segregation, or coercive framing

• Create cross-functional collaboration between DEI, Legal, HR, and Communications

5. Audit and Align Regularly

Make compliance part of your cycle, not a one-time fix.

• Review materials with a protected-class lens

• Conduct regular audits of programs and outreach

• Document decisions to show intentionality and impact

Bottom Line

Equity work is not going away, our communities need us to keep pushing forward, life and access to a quality life is on the line daily. This moment calls for strategic clarity and courageous creativity. Stay grounded in your mission, responsive to legal realities, and bold in designing inclusive, compliant, and impactful systems.

This is your opportunity to show what creative strategy looks like: clearly, courageously, and compliantly.

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