Board Diversity - Labeling members to get government grant money

Working on a city-provided grant for a non-profit organization and notice that this year, they are asking that we not only provide the names and contact information for our board members - but they also would like us to indicate on the report the ethnicity, age, gender, sexual orientation and mental and/or physical disabilities of these individuals.

I’m wondering if this is an entirely legal thing to ask, but since we depend on grant money from our city government to operate each year - it may not be wise to raise a hue and cry over it. However, I’m concerned about the privacy rights of our board members who may not take kindly to having these labels recorded next to their name and addresses for a grant application that is going to the city, and would thus become public record.

Can anyone point me towards something explaining why this is legal, or evidence that it may not be legal. Is this legitimate only for board members, or can the city also require that we also provide the names of our patrons who fit these criteria?