By: Maria Hibbard (with many thanks to legal-aid-funding-guru Steve Grumm!)

The news for civil legal aid funding is rarely positive lately – but, if you’re like me, you may be wondering exactly where these cuts are coming from. The answer is a complicated one dependent on many factors – because there is no civil “right to counsel” mandate (although some smaller-scale “Civil Gideon” programs are on the rise), civil legal aid funding comes from a number of sources, all of which work together to create any particular legal aid organization’s funding. A quick primer on the primary civil legal aid funding sources:

• Legal Services Corporation (LSC) – The largest institutional funder of civil legal aid programs is the Legal Services Corporation – LSC is a nonprofit entity chartered by the federal government in the mid-1970s to distribute federal grants to legal aid organizations – which themselves are independent nonprofits – which then provide legal help to individuals with incomes at or below 125% of the federal poverty level, or $28,813/year for a family of four. LSC funding is, in real dollar terms, at near historic lows. You can view an LSC funding history here.
• LSC Restrictions – Because LSC prohibits the organizations that use its funding from certain types of advocacy, like filing class actions or legislative lobbying, not all civil legal aid organizations take LSC funding. For example, Philadelphia Legal Assistance uses LSC funding, while Community Legal Services of Philadelphia receives its funding from other sources. These two organizations were once united, but changes to the federal regulations governing LSC-funded organizations in the mid-1990s resulted in PLA spinning itself off from CLS in a phenomenon that also played out in many other jurisdictions. PLA continued to receive federal dollars – and was thus subject to considerable restrictions on some of its advocacy – while CLS no longer took federal dollars from LSC. (Whew! Alphabet soup!)
• Interest on Lawyers Trust Accounts (IOLTA) – When a lawyer receives money from a client, that money is placed in a trust account separate from the lawyer’s own money until the work is completed. The IOLTA program takes the interest from these accounts and distributes it to legal aid programs foundations. Such use of  IOLTA funding is mandatory in the majority of U.S. jurisdictions – and is the third greatest source of civil legal aid funding behind LSC and state and local funding. With interest rates having remained at extraordinarily low levels over the past few years, IOLTA funding has been decimated. Nationwide, revenue from trust account interest dropped 74% from $371 million in 2007 to $95 million in 2010.
• State and local government funding – state /local funding for legal services organizations comes from state budget appropriations, fee surcharges, and property funds. We posted last week about how these budgets are volatile, however. Many states have considerably diminished their appropriations to legal aid providers (although New York State is a notable exception).
• Foundations and private lawyer and firm contributions – while much more difficult to measure, these contributions still contribute to a large portion of civil legal aid organizations’ budgets. Although not a direct financial contribution, pro bono attorney services also impact the ability of civil legal aid organizations to improve access to justice.

Understanding the multiple ways in which civil legal aid organizations are funded can help one understand the full extent of the justice gap – because there are no constants in funding, the amount of legal services that are available is unpredictable. This 2007 report estimates that for every person that an organization with LSC funding helped, one was turned away. Many organizations have more recently estimated that they must turn away much higher percentages of would-be clients because of funding shortages. Obviously, advocates for the support of civil legal aid services are constantly needed.

It’s definitely not fun for public interest minded law students to read about how bad funding is now – especially because these numbers are bound to have an effect on the number of jobs. But it’s best to be informed – you can read my colleague Steve Grumm’s weekly blog post on the funding and job developments in the public interest world on our blog every Friday.