The U.S. has become a hostile environment for advocates of diversity, equity, and inclusion (DEI). The opposition to DEI initiatives, which are designed to assist historically marginalized groups, can be summed up in one word: politics.
Conservatives claim that DEI is “reverse racism” and are pursuing legal action. As a result, businesses are slashing funding for DEI commitments.
Amid lawsuits and toxic social discourse, DEI discussions have become a verbal grenade. Words like ‘equity’ and ‘diversity’ have been weaponized – with some conservatives going as far as blaming DEI for the Baltimore bridge collapse and Boeing’s safety failures.
Amid the lawsuits and toxic social discourse, words like ‘equity’ and ‘diversity’ have been weaponized. Some conservatives have gone as far as blaming DEI for the Baltimore bridge collapse and Boeing’s safety failures.
At this point, it may seem like DEI is on its deathbed. However, the current hostility toward diversity and inclusion is nothing new, as many continue to forge ahead with their missions.
Why is DEI so Controversial?
After the 2020 murder of George Floyd by police, the private sector was quick to show their commitments to diversity. However, their tone has shifted in the face of recent conservative backlash and numerous lawsuits.
The opposition to these initiatives, which are designed to assist historically marginalized groups, can be summed up in one word: politics.
Conservatives are claiming DEI is “reverse racism” and pursuing legal action. In response, businesses are slashing funding for various DEI programs. Amid the toxic social discourse, words like ‘equity’ and ‘diversity’ have been weaponized. Some conservatives have gone as far as blaming it for the Baltimore bridge collapse and Boeing’s safety failures.
It may seem like DEI is on the verge of collapse. However, the current hostility toward diversity and inclusion is nothing new, as many continue to forge ahead with their missions.
How did we get here?
The animosity towards DEI can be linked to ‘anti-woke’ sentiment, which has developed into a right-wing campaign to dismantle diversity initiatives in court and through legislation.
In an already unstable economy, the anti-DEI movement has dealt a second blow to BIPOC and women-led startups – leaving them few financial resources.
This all began when the Supreme Court struck down Affirmative Action, a decision that has now impacted the corporate and nonprofit sectors. Most recently, Zoom laid off its entire DEI team, while companies like Google and Meta have defunded their own initiatives. They have also seen a decline in funding for Black-led startups.
The animosity toward DEI can be linked to the ‘anti-woke’ sentiment, which has evolved into a right-wing campaign to dismantle diversity initiatives in court.
In August 2023, the American Alliance for Equal Rights (AAER), founded by Edward Blum —who helped overturn Affirmative Action— filed a lawsuit against Fearless Fund, a venture fund that awards grants to Black women. AAER alleges that the grant discriminates against white and Asian American founders.
Other groups, such as the Small Business Administration and Minority Business Development Agency, along with smaller companies like Hello Alice, are also being targeted for attempting to implement diversity grant opportunities.
These types of lawsuits are causing a growing number of organizations to remove DEI or diversity goals from their reports and documents to avoid legal troubles.
Some have said that certain companies never genuinely cared about the principles and are using this turbulence to back away from previous promises. Privately, many companies are frustrated with DEI, according to Johnny Taylor, president of the Society for Human Resource Management, in an interview with Axios. “The backlash is real, and I mean in ways that I’ve never seen it before.”
Continued Commitment to DEI
Many would say the failure of things like DEI connect back to generations-old bigotry. For those in the private sector, profit vs social responsibility remains a minefield.
After George Floyd was killed by police, everyone from venture capital firms to corporate enterprises were quick to pledge to diversify their portfolios and offices. But today that sediment is reversing. The backlash, along with the current economic climate, has resulted in slashes to DEI investment and programs.
In 2023, the total US venture capital fell by 37%. In contrast, Black-founded startups raised 71% less in funds, according to Crunchbase data. That same year, VC funding awarded to Black-led startups totaled $705 million – the first time it fell below $1 billion since 2016.
When it comes to women-led companies (including mixed-gender teams), overall capital declined in the first half of 2024. Women received a total of $15.5 billion out of the total $93 billion VC funds. Contrasted with 2023, when women pulled in $24.8 billion out of $87.7 billion, according to PitchBook data.
The same data highlights how all-women founding teams have never raised more than 3% in venture capital funding since at least 2014. Over the past four years, all-women founding teams only collected 2% in venture capital funding, even when capital startups hit record heights in the U.S.
We’ve Been Here Before
DEI has become a part of the “branding merry-go-round” that dates back to the civil rights movement. It is clear to all in the diversity space that DEI has been hijacked and twisted. So it’s time to go back to the drawing board – again.
Understandably, there are many who are bitter as they face another hollow promise, especially within the Black community. Support for the cause only seemed to be as relevant as the lifespan of its fad.
On the other hand, many would argue that DEI programs were nothing but ineffective corporate window dressing. Case in point, it has been shown that DEI programs primarily benefit white women.
It seems like many in corporate America only followed a trend, but there is a strong incentive for the private sector to continue advocating for diversity – even if it’s from the shadows. According to a 2023 study by McKinsey & Co., firms with greater diversity are 39 percent more likely to financially outperform more homogeneous workplaces.
So it’s not surprising that employment law firm Littler Mendelson reported that 91 percent of the 320 executives they surveyed had no interest in changing their DEI prioritization. The survey went on to show that in the past year, 57 percent of respondents have even expanded DEI programs.
The most compelling factor that will drive diversity and inclusion across the board is simple: it’s good for business. That’s an irresistible incentive for business leaders.
About the Author: Tess Danielson is a journalist and writer focusing on the intersection of technology and society.
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