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ICLEF gives $100,000 to Indiana Bar Foundation

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The Indiana Continuing Legal Education Forum’s governing board is giving $100,000 to the Indiana Bar Foundation, which is struggling financially because of low interest rates that have hit IOLTA accounts and created problems in funding pro bono and related programs statewide.

At the Indiana State Bar Association’s House of Delegates meeting this morning, ICLEF president Linda Meier announced the donation was approved by the board of directors on Thursday. She said the money is unrestricted, meaning it can be used on any of the IBF initiatives such as pro bono or civil education programs and services.

IBF’s executive director Chuck Dunlap thanked the ICLEF for its generosity, in light of the financial woes in the past year. IOLTA revenue is the primary funding source for the IBF.

“It’s no surprise what interest rates are these days and what that means to IOLTA, and that hurts,” he said, referring to the nation’s historically low rates.

An annual report submitted today at the House of Delegates meeting shows that IOLTA income in 2008 was approximately $3 million, but dropped by half to $1.5 million in 2009 and that for this past year it’s been $670,000.

That translates to a drastic reduction in what the state’s Pro Bono Districts can operate on, according to the report. Grants totaled $1.69 million last year and for 2010 they totaled $1.57 million. The 2011 requests initially were $1.41 million, but have been scaled back to about $1 million. However, only $427,000 is available to distribute from IOLTA revenues, the report shows.

Any shortfall must be addressed by the IOLTA reserve fund of $1.9 million, but the Indiana Supreme Court has set a guideline limiting use of the fund in any given year to 20 percent of the balance. The organization leadership met with Chief Justice Randall T. Shepard to request exceeding that amount so that 25 percent of the reserve balance could be used, providing for about $175,000 in additional funding. The Supreme Court approved the 25 percent request on a one-time basis. Even with this increase and the new ICLEF donation, the IBF would still face a shortfall but it would only be about $75,000 and that could be better covered by carry-over funding from some of the districts.

These funding issues come on the heels of action last year by the state’s highest court, which in October 2009 agreed to step in and offer $25,000 to the IBF’s Loan Repayment Assistance Program for Indiana (LRAP-IN), as well as creating a matching program for any money raised by the bar foundation up to $170,000.

The IBF expects that it will request reconsideration in July 2011 if interest rates improve, but the IBF does expect some “unavoidable reductions” in personnel because of the economic picture.
 

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