Grantees Report Impacts of Continued Freeze on NC IOLTA Grantmaking

Legislation that became law on July 9 bars NC IOLTA from grantmaking from July 1, 2025, through June 30, 2026. The provision was included in Senate Bill 429, the 2025 Public Safety Act.

Consistent with the legislation, the NC IOLTA Board of Trustees has not made grants for the 2026 calendar year. The board typically meets in December to finalize grant decisions and announce awards that begin on Jan. 1 of the new year.

NC IOLTA funding decisions are made on an annual basis. However, a number of grantee organizations are longtime or repeat grantees that consistently deliver measurable positive results with IOLTA funding and had intended to apply for funding for 2026 as well.

NC IOLTA recently surveyed 2025 grantees about the impact of the funding freeze on their organization’s operation and capacity to serve those in need of legal services. Below are some of the findings of the survey.

• As a direct result of the loss of anticipated funding due to the freeze, grantee organizations have been forced to lay off 56 full-time employees, including attorneys, paralegals and other staff, that support access to justice for low-income North Carolinians. Additional layoffs are expected this year absent the freeze being lifted or other funding being identified.
• In addition to layoffs, grantees reported reducing staff hours, consolidating positions, not filling vacant positions and considering reductions to staff benefits.
• While the extent of changes in service capacity is not yet fully known, grantees have already begun to limit intake of new clients and scale back staffed hours at intake and service sites (for example, hotlines, courthouse desks and clinics).
• As staff adjust to reduced capacity without funding from NC IOLTA, organizations acknowledge that the number of individuals served will decrease, processing of cases will be slower, callback times will increase and clients will receive assistance that is less holistic.

The freeze also affects prospective first-time grantees planning to launch new programs and/or expand existing successful programs that either improve access to civil legal aid for low-income North Carolinians or enhance the administration of justice.

As of Jan. 1, 2026, no further legislative hearings have been held or scheduled on this matter. It is unknown when legislators might revisit the funding freeze. North Carolina is currently the only state in the nation that does not provide funding for civil legal aid through either direct state appropriations or IOLTA grantmaking, or both.

NC IOLTA and State Bar leadership continue to work to preserve this critical source of funding for civil legal aid, which comes at no cost to attorneys, their clients or taxpayers.

Learn more and find the most recent update on this issue on our Media Resources page. 

Stories exploring the impact of NC IOLTA funding are available on our Stories page.