When Diversity, Equity, and Inclusion (DEI) programs rolled back, businesses, big and small, community organizations, and non-profits were completely altered. Even the government changed course once the rollbacks took full effect. Government and corporate jobs were cut, federal funding substantially decreased, and small businesses again took a major hit due to decisions above them.
Many companies, including Target, Meta Platforms, and Lowe’s, have dismantled their previous DEI structures and policies. Iowa Attorney General Brenna Bird joined 19 Republican attorneys general in calling on Costco Wholesale to abandon its diversity, equity, and inclusion policies, citing concerns about discrimination and legal risks.
Regardless of politics, DEI experts have said workplace inclusion efforts will only become more necessary as the country’s demographics diversify.
Black business owners and programs also took a major hit due to the rollbacks, as they were already at a disadvantage when applying for capital. According to the Harvard Business Review, three percent of Black women can sustain their business beyond five years, compared to seven percent of white women, who start businesses at a lower rate than their Black peers.
According to the National Women’s Business Council, Black women-owned businesses face higher loan rejection rates, lower funding amounts, and greater difficulty in accessing professional networks compared to their white counterparts. Black women receive just 0.2 percent of venture capital funding despite owning 17 percent of businesses in the U.S.
Nine Black business owners and trade association representatives interviewed by Reuters blamed structural barriers, including challenges raising capital to secure big jobs and the growing size of federal contracts, which tend to favor large companies.
“Over a decade, contracts have been getting larger and larger and fewer and fewer. It gets more difficult for small firms to get in and get the experience they need to become federal prime contractors,” said Isabel Guzman, who headed the Small Business Administration under Biden and oversaw federal contracting programs for minority-owned businesses.
Inclusion involves more than funding; it’s an opportunity for the American dream that was promised to many of our ancestors.
Some of the earliest DEI efforts can be seen in the 60s as a by-product of the Civil Rights Movement. Affirmative action policies were implemented to address the historical underrepresentation of certain groups, primarily focused on race.
In the 70’s DEI expanded to encompass gender equality through the rise of the Feminist Movement and the Equal Rights Amendment (ERA). Pivotal figures who rose to prominence during that time included Shirley Chisholm, Angela Davis and Ruby Bridges.
In the 80s, the movement continued to expand beyond racial issues and gender equality to embrace a broader spectrum of diversity. During this period, DEI initiatives began recognizing and addressing the diverse needs of various identity groups, including ethnic, religious, and LGBTQ+ communities.
As the initiative progressed, certain groups of people were prioritized over others. However, the overarching goal remained unchanged: to assist marginalized groups by providing them with resources for their businesses and creating an equal playing field in the employment industry. When Trump took office, he immediately struck down all DEI programs, affecting millions.
The executive order “Ending Radical and Wasteful Government DEI Programs and Preferencing” laid off federal DEI staff and no longer required federal contractors to use affirmative action and diversity programs. The order “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” rescinded several past executive orders meant to curb discrimination and encouraged private sector employers to “end illegal DEI discrimination and preferences.”
“The attack on so-called DEI is an attack on American entrepreneurship, and this is just the start,” said Dilawar Syed, former deputy administrator of the Small Business Administration (SBA), at an Ethnic Media Services briefing about impacts on small businesses. “The fastest-growing segment of entrepreneurs in our country is people of color, with a historic number of veterans as well.”
The U.S. has 33.2 million small businesses, which constitute 99.9 percent of all businesses.
Over 40 percent of small business owners are women, 24 percent are immigrants, and nearly one in five are racial minorities, with Latinos comprising a major portion of that group.
The executive orders also revoked a 1965 directive from President Lyndon B. Johnson, which mandated non-discriminatory practices by federal contractors. This rollback symbolizes a monumental shift away from federal diversity initiatives.
At the height of DEI in 2020-2023, small disadvantaged businesses received slightly over 12 percent of contract dollars. Black-owned businesses accounted for only a fraction of those contracts, receiving 1.61 percent, per government data. Black-owned firms received an even smaller slice of the pie last year, receiving 1.54 percent of $637 billion in small business-eligible federal contracting.
Los Angeles is combatting this equity problem by creating the Get in the Game initiative accompanied by the Get in the Game LA Supplier Resource Hub, an online digital platform to equip regional small businesses with the tools, connections, and insights they need to compete for procurement opportunities tied to the upcoming global sporting events the city is hosting, including the 2026 FIFA World Cup and the 2028 Olympic and Paralympic Games.
“With the FIFA World Cup and 2028 Olympic and Paralympic Games on the horizon, we want visitors to see beyond our stadiums and experience the vibrancy of Los Angeles’s many small businesses in neighborhoods across the city,” said Los Angeles Mayor Karen Bass. “Through this resource hub, LA’s small businesses can be ready to take the world stage and benefit from the economic opportunity these global sporting events carry.
National Small Business Week is the perfect time to launch this hub, and I look forward to the vital support that local small businesses will access through this new initiative.”
The Get in the Game LA Supplier Resource Hub aims to strengthen Los Angeles’ procurement ecosystem by bridging the gap between buyers and suppliers, opening the door for local businesses to tap into the more than $150 billion expected to flow through the region’s sports, entertainment, and infrastructure sectors over the next decade.
“Many small businesses have the capacity and drive to grow but often face structural challenges when trying to access large-scale opportunities,” said Nicole Williams, Executive Director of LISC LA. “Through innovative initiatives like Get in the Game, we’re working to make the procurement process more transparent and accessible for local enterprises and emerging suppliers.”
Through these multiple touchpoints, the Get in the Game initiative aims to provide tailored support to more than 1,000 small business suppliers, deploy more than $10 million in financing, and facilitate connection to more than $100 million in contracts for small and diverse businesses by 2030.
“Small businesses are the engine of L.A.’s economy, and ensuring they are contract-ready is essential,” said Maria S. Salinas, President and CEO of the Los Angeles Area Chamber of Commerce. “One of the biggest barriers small businesses face is capital, a network, and resources. By connecting them to existing financing and offering signature capital solutions through the Supplier Resource Hub, we’re ensuring they’re contract-ready and able to take on larger contracts.”