Skip to main content
Jul 10, 2012

Revenue Options for Legal Aid Societies

The Chronicle of Philanthropy recently featured an article about the deteriorating finances of legal aid societies across the United States.  A little background from the article: “Unlike criminal cases, Americans have no federal guarantee of legal representation in civil disputes, such as fighting evictions or solving child-custody conflicts. Though federal and state governments helped support legal-aid services in the past, such programs are endangered as public budgets have slimmed down.”

In addition, the interest that collects on trust accounts that lawyers set up for clients also helps support legal-aid programs. But with interest rates at record lows, that source of money has diminished as well.

It is not likely that the trust account interest approach is going to work again soon if ever.  LSA is funded by contributions by attorneys, but that is still not enough.  LSA need to think about taking on some profitable activities to fund their work for the needy.  LSA’s are wary of competing with their fellow attorneys.  But surely there are many opportunities, especially in larger cities, where there is an underserved, paying clientele that will not likely go to a law firm.  One-off engagements, perhaps to review a home improvement contract or get advice on small matters — those things in which an ongoing consultation is not going to happen but a knowledgeable set of eyes would be reassuring.

That wariness of competition has to be overcome.  After all, every nonprofit in some ways competes with a for-profit, so let’s think creatively about how LSAs can earn some money to support their mission and not just hope for a federal solution.

All nonprofits have a money-losing mission and a money-making activity.  I write about this in Chapter 8 of the second edition of Linking Mission to Money.  If you are not yet comfortable with this concept, read the book or, better yet, let me come talk to your staff and board about Defining a Successful Nonprofit.  Fundraising has been a fairly constant percentage of nonprofit revenues since 1983.  This tells me there is no silver bullet in fundraising.  It is important to do, but it will not transform an unsustainable organization.  And governments have enough budget problems that they are not going to be a silver bullet either.