The Trump administration’s pushback against diversity, equity and inclusion is now targeting universities, foundations and public companies — a new development in the movement to dismantle DEI.

President Donald Trump signed an executive order on Jan. 21 in which he calls for “Encouraging the Private Sector to End Illegal DEI Discrimination and Preferences.” That order mandates federal agencies determine which universities, foundations and corporations should be investigated for their DEI policies, among other things.

Specifically, the order directs each agency to identify up to nine “potential civil compliance investigations” of public corporations, large non-profit corporations or associations, state and local bar and medical associations, foundations with more than $500 million in assets and higher education institutions with endowments of more than $1 billion.

“My administration has taken action to abolish all discriminatory diversity, equity and inclusion nonsense, and these are policies that were absolute nonsense throughout the government and the private sector,” Trump said Jan. 23 in an address to the World Economic Forum.

Michael D. Thomas, principal at law firm Jackson Lewis and co-leader of its Corporate Diversity Counseling practice group, said the executive order does not change existing law regarding discrimination in employment and contracting, but rather “signals increased investigation and enforcement activities.”

Federal agencies could base their investigations on information coming from a company’s website, SEC filing, or even a podcast that a company’s CEO made, according to Thomas.

“It could really come from any source from a company that communicates really anything about a DEI initiative or program,” he said.

“There have been similar actions like this in President Trump’s first administration against certain institutions of higher education,” said Farnaz Farkish Thompson, partner at McGuireWoods and co-leader of the firm’s Education Industry Team and Higher Education practice group.

Prior to the 2023 Supreme Court decision overturning affirmative action, the Justice Department in 2020 sued Yale University, alleging that the school was illegally discriminating against white and Asian American applicants by favoring Black and Hispanic applicants in their admissions process, according to Bloomberg.

At endowments and foundations, DEI is a common consideration in their organizations as well as in their investments, according to a 2021 report by NEPC.

At the time, more than 40% of the clients in the investment consultant’s endowments and foundations practice included diverse managers in their portfolio, and performance research at these managers “validated this mission-driven goal,” the report noted.

Endowments and foundations that P&I reached out to declined to comment or could not respond immediately. While a spokesperson for Fordham University in New York could not comment on the executive order immediately, they added in an email that the situation is still new and “apparently rapidly evolving.”

The Minneapolis-based Knight Foundation also noted that it is still reviewing the news over the past week and is “unable to provide a detailed response.”

Consultants and industry groups that work with endowments and foundations, as well as associations that promote diversity in institutional investing, also declined to comment.

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