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IOTA’s future looks bright

first_imgIOTA’s future looks bright October 15, 2005 Managing Editor Regular News IOTA’s future looks brightcenter_img Higher interest rates mean more revenue for legal aid Mark D. Killian Managing Editor It’s a new day for The Florida Bar Foundation.After years of struggling with declining revenues that forced cuts in legal aid funding and the depletion of the Foundation’s reserve accounts, increased revenue from a steady rise in IOTA account balances and climbing IOTA interest rates are bolstering the charitable organization’s financial health.The Foundation expects to have more than $27 million available for its grant programs in 2005-2006, up from slightly more than $11 million a year ago.“Happy circumstances of increased revenue provide for increased opportunities,” President Bill Davis said at the Foundation’s recent Tallahassee meeting.On the recommendation of its Grant Program Committee, the Foundation board voted to increase its allocation for legal assistance to the poor and law student assistance grant programs from $10.5 million last year to more than $16.1 million this year. The board also doubled funding for its administration of justice grants program to $1 million.The Foundation also earmarked $10.3 million to begin re-establishing its grant program reserve. Davis said the specific goal of rebuilding the Foundation’s reserves is to maintain allocations for its grantees for up to four years if or when IOTA revenues go into another down cycle. That’s the way the annual grant allocations to legal assistance providers were kept relatively stable — along with allocating more of the Foundation’s income to legal assistance to the poor programs and less to the administration of justice and law student assistance projects — when IOTA bank interest rates dropped in the mid- to late-1990s. Then the Foundation had to deal with IOTA income that tumbled from about $19 million a year to between $10-$11 million per year.The increase in legal aid funds in 2005-06 still comes up short of the funding levels of the late 1990s, when inflation and the increase in Florida’s poverty population is taken into account.“Thank goodness we had a staff and previous boards that saw fit to create a reserve which carried [the Foundation’s] grantees without so much pain during the last downturn,” Davis said, noting the goal is to fund the reserves at about $24 million by September 2006.Board member Kathleen McLeroy of Tampa said she supports re-establishing the reserve fund because the Foundation owes an obligation to the clients of its grantees to make sure the legal aid infrastructure is in place in Florida.“I think we should be the overseer of legal aid programs throughout the state and we owe the clients, not the grantees, but the clients, a stable system,” McLeroy said.James Bell, president of Florida Legal Services, Inc., agreed, saying a reserve fund assures legal aid providers that they can continue their programs “if something drastic happens.”“I think we would be remiss to not have some type of situation where we have a reserve to keep these programs going,” Bell said.“It is nice to know that if the worst case scenario happens, we can sort of taper off our grantees, not just cut them off,” said board member Miles McGrane of Miami.last_img read more