FUNDING FOR LEGAL AID ORGANIZATIONS
Legal aid organizations are a primary provider of civil legal services throughout the state. Various funding sources—government, foundations, and individual donors, among others—enable legal aid organizations to provide these services to the lowest-income Californians without charge. The first section will explore different funding streams that support the work of legal aid organizations funded by the State Bar. Though such organizations represent a subset of all organizations in California offering free legal services, they also provide applications, reports, and data to the State Bar, which helps illuminate the existing funding landscape.[1] The next sections will then turn to challenges experienced and outcomes achieved by legal aid organizations.
LEGAL AID FUNDING
Funding Sources
As shown in table 16, which presents legal aid organizations’ revenue in 2019 and 2023, diverse funding sources allow legal aid organizations to serve the lowest-income Californians.[2] These funding categories include the following:
State Bar of California legal aid grants: As the state’s largest single funder for legal aid, the State Bar distributes grants to organizations that provide free civil legal services to indigent persons.[3]
Individual and organizational contributions received through fundraising efforts. These support an organization generally, whereas many other forms of financial support often have restrictions requiring funds to be directed to specific efforts or spent within a certain period.
Foundations that engage in philanthropy, either for particular projects or general operations.
Government funders at federal, state, and local levels, including the Department of Justice, the California Department of Social Services, and the County of Los Angeles. Government funders represented the largest combined funding source for legal aid organizations in both 2019 and 2023.[4]
Other cash support, which encompasses any other legal aid organization revenue not captured by preceding categories.
Table 16: Detailed Revenue for State Bar-Funded Legal Aid Organizations: 2019 and 2023 (in Millions)
Note: The number of organizations funded by the State Bar in 2019 and 2023 was 98 and 101, respectively. Funding amounts are not adjusted for inflation.
Overall, funding for State Bar grantees increased more than 62 percent between 2019 and 2023. In 2019, State Bar legal aid grants accounted for 16 percent of the total funding that legal aid organizations received. By 2023, State Bar legal aid grants had increased to 18 percent of total funding. Many of these increases were driven by: temporary funds disbursed to meet acute legal needs during and after the COVID-19 pandemic, high trust account deposit balances, and sustained high interest rates to counter inflation in recent years. As a result, these funding increases may be temporary.
State Bar of California Legal Aid Grants
The State Bar, through the Legal Services Trust Fund Commission (LSTFC), administers a variety of legal aid grants to help meet the need for services among low-income and other vulnerable Californians. The LSTFC’s mission is “to clos[e] the justice gap in California by increasing equitable access to legal services for low-income and underserved communities.”[5]
The State Bar currently funds over 100 organizations, distributing over $180 million in funds in 2024 through statutory formula grants and discretionary grants.[6]To receive a formula grant, an organization must demonstrate that it meets the basic criteria for funding; it will then receive an award based on a formula set forth in California Business and Professions Code section 6216. (Interest on Lawyers’ Trust Accounts (IOLTA) and Equal Access Fund (EAF) grants are the two largest formula grants administered by the State Bar.) In contrast, discretionary grants typically target specific areas of law or acute needs through a competitive process requiring detailed proposals on fund usage. Award sizes depend on project scope and proposal strength.
Interest on Lawyers’ Trust Accounts
In 1981, the California Legislature authorized the IOLTA program under Business and Professions Code sections 6210–6228 (IOLTA Statute). The IOLTA Statute requires lawyers to place client funds that are nominal or will be on deposit for short periods of time into interest- or dividend-bearing accounts in which the interest or dividend is paid to the State Bar. The primary funding source for IOLTA grants is the interest remitted to the State Bar from these client trust accounts.
Equal Access Fund
In 1999, the California Legislature established the EAF, which is reauthorized annually through the state budget.[7] EAF is distributed in two parts: (1) 90 percent of the funds are distributed according to the statutory IOLTA formula, and (2) 10 percent are distributed as discretionary Partnership Grants. Grantee organizations must use EAF funds to provide an identified set of services that can be evaluated, such as to a particular client constituency or in a specific area of law, for example.
State Bar Funding Trends
The amount of legal aid grant funding disbursed by the State Bar over the last 10 years is provided in figure 45 (amounts not adjusted for inflation).[8] In general, the two major formula grants (IOLTA and EAF) comprise the majority of funds disbursed, except in 2023. Key trends include the following:
- There has been rapid growth in funds disbursed over the last 10 years, except for 2021, when grants disbursed dropped to $60.4 million. In 2014, just $30.4 million was disbursed, while over $180 million was disbursed in 2024.
- While the IOLTA distribution has trended upward in the past few years, this funding is vulnerable to economic volatility due to changing interest rates. For example, figure 45 shows a significant drop from 2020 to 2021. This drop reflects large interest rate cuts in 2020 during the COVID-19 pandemic, which led to substantially lower interest income available to distribute as grants in 2021. In contrast, sustained high interest rates in the past few years—implemented to counter rising inflation—have led to a five-fold increase in funds from 2023 to a planned distribution of $252 million in 2025, representing a high-water mark for IOLTA funds. Consequently, IOLTA may be considered a consistent but variable grantee funding source.
- EAF funding has more than doubled over the last 10 years, from approximately $14.5 million in 2014 to $31.5 million in 2024.[9]
- Discretionary grant funding has experienced the most dramatic increase since 2014. That year, just $1.5 million was disbursed, compared to $53.7 million distributed in 2024.
Figure 45: Total Amount of Legal Aid Grant Funding Disbursed by the State Bar, 2014-2024 (in Millions)
Note: The totals for 2023 include $21.4 million in CARE Court funding, some of which went to public defender offices throughout the state. See the overlay page on discretionary grants for a description of this source of funding.
CHALLENGES FACED BY LEGAL AID ORGANIZATIONS
Between 2019, when the first California Justice Gap Study was conducted, and 2024, the amount of State Bar funding to legal services organizations increased by over $100 million, a 134 percent increase.[10] As the NORC survey of Californians’ civil legal needs found (summarized in "Measuring Californians' Unmet Civil Legal Needs"), 73 percent of lowest-income households (defined as those at or below 200 percent of the federal poverty level) experienced at least one civil legal problem in the last 12 months, and one in five had 10 or more. The survey also showed that despite this need, these households received little to no legal help for the majority of their problems. Survey results suggest that even with meaningful increases in funding and services, the demand for legal services from the state's lowest-income residents continues to outpace current supply.
In particular, legal aid organizations often cite recruitment and retention of attorneys as a predominant challenge in maintaining or expanding services, issues that were well documented in the 2019 California Justice Gap Study.[11]
The primary reasons for turnover have remained consistent in the years since the 2019 report was published: financial pressure due to low salaries and educational debt.[12] Organizations that primarily rely on pro bono services have also struggled to maintain pro bono engagement at the level required to close the justice gap despite a slight increase in the number of attorneys engaged in pro bono legal services (see table 17).
Increased funding has little impact on service availability unless accompanied by sufficient staffing. Anecdotally, organizations report that—even with the expanded hiring that additional funding enables—it takes time to see results from increased staffing. Employers must devote time and resources to train new hires; build their capacity to work independently and take on more, or more complex, cases; and absorb the impact of turnover, which redirects some funds to recruitment efforts.
Table 17 explores staffing changes at State Bar-funded organizations between 2019 and 2023, the most recent year of data available.[13] As the table shows, staffing has increased significantly, with legal aid organizations onboarding more attorney and nonattorney staff.
Key findings include the following:
- Between 2019 and 2023, State Bar grantees, in total, added 388 attorneys to their staff, with an average of three more attorneys per organization. These additions represent a 24 percent increase in attorney staffing.[14]
- In 2023, there was one legal aid attorney per 5,338 indigent Californians (defined as living at or below 200 percent of the federal poverty level). This ratio is a significant improvement (approximately 28.5 percent) from 2019, when there was one legal aid attorney per 7,466 indigent Californians.[15] While the increase in attorney staffing in the past five years has improved the ratio of attorneys to indigent persons, it is still insufficient to meet demand.
- Although the number of attorneys offering pro bono services has increased, pro bono volunteerism (in terms of hours) has also not recovered to pre-pandemic levels, further curtailing available services.
- Nonattorney staff have increased significantly (49 percent increase). Some organizations have moved to service models that allow greater utilization of nonattorneys under the supervision of attorney staff, which may extend services to more individuals and influence the level of service an organization can provide.
Table 17: Staffing at State Bar-Funded Organizations: 2019 and 2023
Note: Information on attorney (staff and pro bono) and nonattorney staff was derived from State Bar grantees’ 2019 and 2023 staffing reports.
OUTCOMES ACHIEVED BY LEGAL AID ORGANIZATIONS
Between 2019 and 2023, State Bar-funded legal aid organizations achieved 656,365 legal outcomes for their clients.[16] These outcomes include obtaining court orders, negotiating settlements, winning monetary awards, and more. Housing (130,687), family/domestic violence (62,430), immigration (42,802), disability rights (42,077), health and long-term care (37,186), and income maintenance (31,599) were the top areas of law where outcomes (i.e., substantive results that benefited the client) were achieved.[17] Legal aid organizations served an additional 764,861 people through self-help clinics and fielded 571,629 hotline calls during that same period. Hotline calls, in particular, showed a tremendous increase over time, with 65,089 in 2019 compared to 166,810 in 2023 (156 percent increase).[18]
Further, legal aid organizations recovered almost $544 million on behalf of clients (examples include back pay awards for uncompensated work time, monetary awards for harm caused by the other party, sanctions against the other party in the court proceeding, etc.) and obtained an almost $315 million reduction in amounts owed by clients (examples include avoiding wage garnishment, reduction or elimination of unpaid rent or medical debt, etc.).[19]
Despite challenges in meeting the full demand for civil legal services from eligible clients, these efforts reflect the significant impact legal aid organizations have on reducing the justice gap for the lowest-income Californians.
CONCLUSION
Funding from various sources, including the State Bar, supports legal aid organizations that offer access to justice for Californians living at or below 200 percent of the federal poverty level. These organizations provide a significant number of services and received a substantial increase in funding since the 2019 Justice Gap Study Report. However, it is clear from the NORC survey results that demand continues to exceed supply of these critical legal services. While the ratio of legal aid attorneys to indigent Californians has meaningfully improved in the past five years, the 2022 statutory amendment to expand client eligibility from 125 percent of the federal poverty level to 200 percent of the poverty level enabled 4.5 million more low-income Californians to access these services.
Future research will explore in greater depth the amount of legal aid funding available per eligible client, especially in light of expanding eligibility requirements for IOLTA-funded work. More detailed data is needed to better understand the factors contributing to ongoing unmet needs. In particular, collecting information about service models and conducting a mandatory intake census at regular intervals among State Bar-funded organizations will help illuminate how changes in funding and staffing, among other things, impact service delivery.[20]
These efforts will be supported by the Legal Services Trust Fund Commission, which has committed to improved data collection and tracking of outcomes as part of its 2024-2028 Strategic Plan.