a) the wording makes it legally ambiguous what exactly would constitute violating the text. If it just said “comply with anti-discrimination laws,” that would be one thing.

b) It applies to the whole organization, not just the group accepting and applying the grant, making it very challenging to meet the requirement.

c) Unlike just about any other grant, the funds can be clawed back in the future if something was violated. This is not normal for a grant, and puts the entire organization’s existence in jeopardy if they suddenly find themselves owing millions of dollars that had already been spent.

It’s very likely their legal council told them under no circumstances should they accept the terms.