Position Statement to Support the Ending of the Legal Services Corporation (LSC) Entity Restrictions 

Proposed and supported by the NAIP Executive and Racial Justice Committees. 


LSC grants are subject to statutory and regulatory restrictions that prohibit a grantee from performing certain activities and from representing specific categories of clients. These restrictions apply to the use of LSC funds as well as to an LSC-funded program’s use of other funds, such as private funds, charitable donations, and other public funds. For more information, please see the LSC regulation regarding the use of non-LSC funds at 45 C.F.R. Part 1610.  Thus, activities that are allowable and desirable by other funders are restricted due to the “entity” restriction. As a result, LSC-funded programs cannot provide representation to those clients. NAIP wholeheartedly believes that no funder should determine the priorities of other funding entities through such restrictions. 

The LSC restrictions include broad prohibitions, with limited exceptions, on representing people who are not citizens and those who are incarcerated. Under the restrictions, these individuals may not be represented by LSC-funded programs regardless of the funding stream used to provide services. These restrictions disproportionately and negatively impact communities of color and are counter to democratic principles and the rule of law. NAIP firmly believes there should not be a separate service delivery system for those communities that have been prevented from accessing services through the primary system. 

Nationally, IOLTA programs administer IOLTA, federal, state, private, and other dollars totaling approximately $162 million per year. Indeed, in many states, the IOLTA program is singularly the largest funder of civil legal services. As such, it is the most impacted funder. The entity restriction may limit IOLTA programs’ ability to pursue their priorities or may require the creation of separate delivery systems to ensure that the promise of justice is available to all. Additionally, LSC-funded programs throughout the country lose out on funding opportunities because IOLTA programs choose to fund non-LSC legal aid programs that are not subject to LSC restrictions. This leads to the duplication of efforts, lack of coordination, and other inefficiencies detrimental to the legal aid delivery system.  



NAIP supports the elimination of the “entity” restriction on LSC funds, which unduly burdens state funders. The removal of the entity restriction would allow each IOLTA program to make funding decisions in accordance with its own jurisdiction’s priorities, needs, as well as enacting authority and rules. Importantly, it would eliminate multiple barriers on access to justice for historically marginalized communities because of their race and/or ethnicity.