Key Takeaways

  • U.S. companies are reducing philanthropic spending aimed at promoting racial and gender equity while increasing support for education and economic opportunity, in response to a "dramatic shift" in government policy, the Conference Board said on Tuesday.
  • Corporate philanthropy leaders said the biggest obstacle to achieving their goals is proving return on investment. The Conference Board survey found that navigating U.S. political uncertainty and polarization, as well as measuring and validating social impact, were also major challenges cited by respondents.
  • The Conference Board noted that the shift in philanthropic priorities "may reflect a response to recent backlash against DEI (diversity, equity, and inclusion) and a move toward less controversial and more business-aligned themes." Companies are adapting to "changing political, social, and economic dynamics, placing greater emphasis on business value, measurable outcomes, and addressing bipartisan challenges."

In-Depth Analysis

The shift in corporate philanthropy comes amid government pushback against environmental, social, and governance (ESG) goals in both the private and public sectors. Since his first days in office, President Donald Trump has sought to dismantle many of his predecessor's federal programs promoting DEI.

In a January 21 executive order, Trump also directed federal agencies to pressure the private sector to end DEI initiatives. Under the order, agency heads, in coordination with the Attorney General, must submit reports by May 21 recommending how to "encourage the private sector to end illegal discrimination and preferences, including DEI."

The private sector has received the message. Vanguard adjusted its proxy voting guidelines for engaging with U.S. companies on Friday, softening its recommendations regarding diversity in board composition. The investment management firm's "2025 U.S. Regional Proxy Voting Guidelines" removed a recommendation from the previous year's rules that boards should "represent diversity of personal characteristics, including at least diversity of gender, race, and ethnicity."

The Conference Board said that while most companies plan to maintain their corporate citizenship communication strategies, 37% are adjusting their language to "more neutral and inclusive" phrasing. These changes stem from "sensitivity to the polarized social and political context."

The Conference Board said so-called "corporate citizenship leaders" this year view artificial intelligence, employee-driven programs, and "outcome-based philanthropy" as the most effective emerging philanthropic initiatives.

Andrew Jones, senior researcher at the Conference Board's ESG Center, said in an email that corporate social responsibility strategies promoting education and economic opportunity "are directly linked to long-term business strategy—especially in a tight labor market."

"Unlike more polarizing social issues, these topics enjoy bipartisan support and offer clear business returns—strengthening talent pipelines, fostering economic stability in key markets, and enhancing corporate reputation," Jones said in response to questions. "Even if broader political trends shift, the business case for these focus areas remains strong, so they are likely to persist beyond short-term cycles."

The Conference Board said that of the 121 corporate philanthropy leaders surveyed, more than half (53%) expect changes in the regulatory environment will not prompt them to adjust budgets or other resources this year. However, "21% of respondents anticipate increased demands to prove the cost-effectiveness of their citizenship programs, indicating that organizations may face greater scrutiny of discretionary spending and a greater need to align initiatives with core business priorities and shareholder value."

Jones said chief financial officers can improve the measurement and validation of corporate philanthropy ROI in three steps:

  1. Strengtheninternal governance of philanthropy, aligning citizenship teams with finance, HR, marketing, and strategy teams "to ensure clear reporting structures, budget alignment, and business impact";
  2. Integratephilanthropic metrics with financial and operational KPIs. "Companies should not view philanthropy as isolated work but rather link it to brand equity, employee retention, and even customer loyalty—especially in industries where sustainability and corporate purpose influence consumer choices," Jones said;
  3. Quantifyfinancial impact through data-driven analysis, including comparing outcomes before and after philanthropic efforts, modeling various scenarios across regions or business units, and "assigning monetary value to outcomes such as reduced turnover or increased brand loyalty," Jones said.