United force: Central Mass. business leaders are standing by their DEI initiatives amid federal funding threats

President Donald Trump had barely stepped back into the Oval Office when he signed a number of executive orders in January, demanding organizations receiving federal funding terminate their diversity, equity, and inclusion initiatives or have their funds shut off.

The administration has deployed a campaign categorizing DEI efforts as illegal and immoral discrimination, asserting that eliminating them will bring back a merit-based hiring system supposedly in place before their implementation.

“The loudest voices right now are working to disparage the work of inclusion and to sort of recreate this false narrative that merit is what ruled before,” said Valerie Zolezzi-Wyndham, founder of equity-based consulting firm Promoting Good in Worcester.

National brands such as Target, Morgan Stanley, and McDonald’s ditched their DEI efforts. Others, such as Apple, Costco Wholesale, and Lowe’s, have doubled-down on DEI, despite the threats.

In Central Massachusetts, a group of top business executives are taking a public stance, sticking with DEI while at the risk of losing federal revenue. The leaders of Edward M. Kennedy Community Health Center, Spectrum Health Systems, and Fontaine Bros., all of Worcester, collectively believe the benefits of DEI initiatives are reaped on personal and companywide levels. With their equity initiatives enhancing employee experience, fostering innovation, and promoting longevity, these business leaders are ready to fight for what makes up the fabric of their organizations.

“We're not going to change the core of who we are as people or as a health center to respond to the whims of someone who is unstable,” said Steve Kerrigan, president and CEO of Edward M. Kennedy Community Health Center.

Risking millions

This year marks 60 years since the country’s first community health center was founded as part of a movement based in providing equitable care, regardless of a person’s circumstances in life, and one that honors the diverse nature of us as people, Kerrigan said.

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Photo I Courtesy of Edward M. Kennedy Community Health Center

Steve Kerrigan, CEO & president of Edward M. Kennedy Community Health Center

“It's like asking us to walk away from our right arm,” he said. “Trying to get DEI out of our organization would be like trying to cut the fat out of a marbleized steak, or remove all the veins from a human body.”

Kerrigan isn’t concerned about possible federal funding cuts affecting the center’s DEI director position, as the nonprofit does not use federal funds to pay its salary. On the other hand, Kennedy Community Health is at risk of losing money if Trump cuts Medicaid funding to organizations that use the words diversity, equity, and inclusion.

“Bullies go after things they're threatened by,” said Kerrigan. “If you're going to feel threatened by a place that provides care regardless of your ability to pay, in an inclusive manner, then I don't have much space for you.”

Medicaid accounts for about 35% to 40% of the health center’s revenue with about 32% of its clients using Medicaid as their insurer. The center has about $56 million in annual revenue, according to nonprofit data provider Guidestar.

Until executive orders are put into place, Kennedy Community Health is operating as normal while advocating with its supporters in Congress to push back against potential cuts.

“Right now, we're telling our stories to anybody who listens about what the impact of Medicaid cuts or elimination would be,” said Kerrigan.

Spectrum Health is at risk of federal cuts as it sticks to its DEI principles, said President & CEO Kurt Isaacson.

Spectrum has a DEI committee that over the past few years has combed through its human resources and client handbooks, electronic medical records, and clinical written plans for clients to determine where the organization could improve. It has performed market studies and focus groups on its equity practices and has implemented implicit bias and interrupting racism training.

Spectrum isn’t willing to back away from these efforts, Isaacson said.

Not only do DEI commitments boost employee morale, Isaacson said research shows receiving health care by someone who looks like you and shares your lived experiences leads to improved outcomes.

There is no shortage of literature that backs up this claim. For instance, a 2020 study by researchers at Penn Medicine, a Pennsylvania-based academic medical center, analyzed 117,589 patient surveys and found patients who shared the same racial or ethnic background as their physicians were more likely to give the highest possible patient rating.

Spectrum has the reserves to sustain itself through the possible Medicaid cuts, said Isaacson. The nonprofit has expanded its programming and increased its revenue, keeping it secure for several years into the future. Spectrum Health generates about $130 million in annual revenue, according to Guidestar.

“We're grateful to be in a position that we can afford to do that,” he said.

Even still, the continuous changes to what is being communicated from Washington, D.C. is not an easy space for Spectrum to navigate.

“People are frustrated because there's one direction one day and another direction the next. And [federal government employees] are terminated one day and reinstated the next. So it's very, very difficult to predict, and that's a very uncomfortable place to be,” said Isaacson.

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Company DEI commitment chart

The cost of broken trust

Companies should stick to DEI commitments not only because of what they provide employees, but because of what it communicates when they roll back commitments, said Zolezzi-Wyndham.

“You break trust with your stakeholders, both employees and customers or patients, when you make commitments and then take them back,” said Zolezzi-Wyndham. “Trust is also vital to organizational success and mission impact.”

Taking back commitments, no matter what they are, harms a company’s reputation, and consumers will choose to take their business elsewhere, she said.

The increasingly diverse U.S. population means if employers don’t do the work to respect employees from various backgrounds and to understand what those individuals want from a job, those companies are not going to be able to attract and keep talent. Employees want to work in cultivating environments that will thrive, said Zolezzi-Wyndham.

"From a financial survival [standpoint], doing this work is going to make you relevant in the future,” she said.

For construction firm Fontaine Bros., the tie between diversity and longevity has been well-established. As builders and contributors to workforce development with a presence of nearly 100 years, diversity is fundamental to the business, said CEO David Fontaine. He sees it as his business’ responsibility to provide opportunities to people that represent the communities Fontaine Bros. works in.

The company operates offices in Springfield and Worcester, two of the most diverse cities in the state. Employing leaders from a range of backgrounds and perspectives means Fontaine Bros. will best meet the needs of those who will be impacted most by its decisions, solutions, and builds, Fontaine said.

“We're going to stay the course and stay committed to [DEI], because our approach to it has never been driven by just compliance with federal guidelines,” said Fontaine. “Nor will our approach to it be deterred by different guidelines.”

As a company that receives federal funding for some of its projects, Fontaine Bros. stands to possibly lose revenue because of its DEI pillar. For now, the company is waiting on standby to see how that risk will play out in actuality.

Executives may feel safer pulling away from DEI, to protect their companies from Trump's wrath, said Zolezzi-Wyndham. But what those employers are missing is federal cuts won’t stop here.

“The current administration is going to cut what they want to cut, and you're not going to be safe,” she said.

Even those who voted in support of the Trump Administration aren’t being saved, Zolezzi-Wyndham said. Some federal workers who voted for Trump have been laid off or had their immigrant family members are being deported.

Eventually, the government will make a move that will hurt businesses no matter if they dropped DEI or not, she said.

“You're sort of sacrificing providing respect to employees and to consumers. And at the end of the day, that sacrifice isn't guaranteeing your safety,” she said.

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Company DEI commitment flash poll

Speaking up

Whether a company knows what it will do or not in regards to DEI, what it needs to do is communicate with its employees, said Zolezzi-Wyndham.

She’s hearing workers express palpable fear over DEI. Part of that distress is from lack of communication from company leaders, leaving air to be filled with inferences that may or may not be true.

In the fall, Fontaine Bros. held a companywide meeting, letting employees know its DEI approach wouldn't change.

“We said, ‘No matter what happens with this, we want to make sure that we're clear and committed,’” said Fontaine. “It's not something that's been reactive, nor will it be.”

Isaacson has issued two memos to Spectrum employees in the past few weeks saying the firm is remaining committed to providing equitable services.

“People are scared, and the first one that went out said, ‘People, we're not changing how we operate,’” he said.

Not all companies are in a position like Spectrum or Fontaine Bros. to be confident in the face of federal threats, and that’s why people shouldn’t jump to conclusions as to why some organizations are shifting their verbiage or strategy. Some businesses feel they have to make a shift in language to be able to work, said Zolezzi-Wyndham.

For those who do feel confident, making their support known is critical.

“People who can safely say that this work is about excellence and about making sure that the people with merit are included. People who can say that loudly need to say it loudly,” said Zolezzi-Wyndham. “Silence right now means that there's only one narrative, and it's not a factual narrative.”

Mica Kanner-Mascolo is a staff writer at Worcester Business Journal, who primarily covers the healthcare and diversity, equity, and inclusion industries.