The decline in services follows grantee office closures, staff reductions and the consolidation of programs serving rural communities due to the loss of anticipated NC IOLTA funding for 2026.
Published on
Posted in News
With IOLTA Grantmaking Frozen, Legal Aid Providers Report Drop in Cases Closed, Clients Served
The North Carolina General Assembly’s freeze on NC IOLTA grantmaking for 2026 has resulted in measurable losses in access to civil legal services for low-income North Carolinians, according to data shared by legal aid organizations across the state.
Recipients of the program’s 2025 civil legal aid grants reported an average of 22% fewer cases closed and 11% fewer clients served in the first quarter of this year compared to the same period in 2025. Among grantee organizations that provide services in family law, the drop is even steeper, with 29.4% fewer clients served in matters including domestic violence protective orders, child custody agreements and guardianship provisions.
The decline in services follows grantee office closures, staff reductions and the consolidation of programs serving rural communities due to the loss of anticipated NC IOLTA funding for 2026.
“These numbers translate to thousands of North Carolinians — families, seniors, veterans, children, people with disabilities — without access to legal aid to secure and protect their fundamental needs such as housing, health care, employment and safety from violence in 2026,” NC IOLTA Executive Director Mary Irvine said. “That’s a significant step backward in the journey toward fulfilling America’s promise of ‘justice for all.’”
The freeze is set to expire on June 30. No further legislative action regarding NC IOLTA’s grantmaking has been introduced. NC IOLTA anticipates further action before the end of the current session that may redirect IOLTA funds and/or significantly curtail NC IOLTA’s core purpose of funding civil legal aid in North Carolina.
Grant program has made big impact — with no taxpayer funding
The philanthropic program of the North Carolina State Bar, NC IOLTA is funded by interest earned on lawyers’ general trust accounts, a nationwide model known as IOLTA. Grants are made at no cost to attorneys, their clients or North Carolina taxpayers. Since its inception in 1983, the program has dedicated more than $134M to support access to justice for low-income North Carolinians in civil matters including housing security, access to wages and benefits, protection from consumer fraud and disability rights.
In 2025, 42 organizations across the state were awarded $12M in grants, including more than $11M in civil legal aid grants to nonprofits such as Charlotte Center for Legal Advocacy, Pisgah Legal Services and Legal Aid of North Carolina, which serves all 100 counties. The impact of NC IOLTA’s civil legal aid grantees in 2025 included:
- 43,061 clients provided direct representation
- 94,696 household members benefited
- 3,184 Domestic Violence Protective Orders secured
- 6,327 evictions prevented
- 564 wills obtained
- 345 homes saved from foreclosure
- 79,984 individuals attending online or in-person community education sessions
More information on NC IOLTA’s impact as a partner and funder in access to justice is available in our 2025 Annual Report.
Legislative action makes NC the only state without IOLTA-funded aid
The provision barring NC IOLTA grantmaking from July 1, 2025, to June 30, 2026, was included in legislation introduced in the House and enacted by the General Assembly in July 2025. In October, Irvine and State Bar Executive Director Peter Bolac were called to testify before the House Select Committee on Oversight and Reform about the structure, governance and history of the program as well as its role in supporting access to civil legal services across the state. No further legislative hearings have been held.
A performance audit of NC IOLTA’s 2023, 2024 and 2025 grantmaking that took place during the freeze did not identify any instances of funds being improperly disbursed by the program’s Board of Trustees or being misused by grantee organizations, which must meet strict eligibility requirements and are prohibited from using IOLTA funding “for any political campaign or to support attempts to influence legislation or any governmental body.” NC IOLTA staff have committed to bringing the audit team’s recommendations to the board within six months.
North Carolina is currently the only state in the nation that does not provide funding for civil legal aid through IOLTA grantmaking. NC IOLTA and State Bar leadership continue to work to preserve this critical source of funding for civil legal aid.
For more information about NC IOLTA, the importance of civil legal aid and the impact of this legislative action, visit our Media Resources page.