The U.S. Department of Justice (DOJ) is taking aim at Illinois’ landmark law that requires large nonprofits to disclose the demographics of their leadership. The law, which took effect in January 2025, mandates that nonprofits distributing $1 million or more in grants publish online details about the race, ethnicity, gender, sexual orientation, gender identity, disability, and veteran status of their directors and board members.
This development comes after the American Alliance for Equal Rights filed a lawsuit in January, claiming that the Illinois law forces private entities to discriminate. In its court filing, the alliance argued that requiring nonprofits to share such demographic information is unconstitutional and unfairly targets individuals based on race and sex.
The DOJ, aligned with President Donald Trump’s stance on dismantling diversity, equity, and inclusion (DEI) initiatives, has moved to intervene in the case, calling Illinois’ law a violation of equal protection under the law. Attorney General Pam Bondi emphasized the DOJ’s commitment to eliminating “illegal race and sex preferences” across the government. Bondi stated, “The United States cannot and will not sit idly while a state denies its citizens equal protection under the guise of diversity.”
Illinois Attorney General Kwame Raoul, in contrast, pledged to defend the law, asserting that it does not discriminate on the basis of race and that his office is committed to defending its constitutionality.
The Law’s Purpose and Its Impact on Nonprofits
Illinois’ law aims to increase diversity and representation within nonprofit leadership by requiring detailed demographic reporting. Its backers argue that nonprofits should reflect the communities they serve, and that diversity fosters richer perspectives, better decision-making, and stronger community engagement. Illinois State Senator Adriane Johnson, a sponsor of the bill, stated, “Diversity brings together a range of experiences, perspectives, and ideas, and it’s essential that nonprofits embrace these differences.”
However, the law’s opponents argue that the mandatory disclosure of demographic information could lead to unwanted “public shaming” of nonprofits perceived as not diverse enough. The American Alliance for Equal Rights believes that nonprofit leadership should be based on merit, not demographic quotas.
The lawsuit also raises concerns about the law’s infringement on First and Fourteenth Amendment rights, arguing that nonprofits should not be compelled to promote diversity metrics if they believe such characteristics are irrelevant to their organizations’ missions. Two charitable organizations, represented in the lawsuit, say they fear the demographic questions could negatively affect their relationships with donors and other organizations.
Legal and Social Implications of the Dispute
The case has significant implications for both nonprofit governance and state-level diversity initiatives. While supporters argue that the law will encourage more inclusive leadership, critics contend that it infringes on nonprofit autonomy and could lead to unnecessary politicization of board appointments.
As the legal battle unfolds, the focus will be on balancing the push for increased diversity with the protection of constitutional rights. The outcome could set a precedent for future state-level diversity mandates and their compatibility with federal constitutional protections.
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