With annual revenue from Florida's Interest on Trust Accounts (IOTA) program down 88 percent since the 2007-08 fiscal year, the Foundation is exploring ways to supplement IOTA funds while cutting grants in order to stretch its grant reserve fund.
"While our grant reserve fund has enabled us to keep funding levels steady throughout the last two years of significantly decreased IOTA revenue, we did not anticipate that IOTA account interest rates would remain so low well into 2012, which is the most recent forecast," said Foundation President John Noland, adding that the statewide average IOTA account interest rate after deducting bank service charges is 0.19 percent.
Bank interest rates on deposits are the largest factor in IOTA revenue, accounting for more than 90 percent of the recent decline.
In the fiscal year ending June 30, 2008, IOTA revenue was $44 million. In the 2009-10 fiscal year it was $5.4 million.
The Foundation is exploring strategies to generate resources to supplement IOTA funding while carefully trimming grants in order to stretch the $20 million remaining in its grant reserve.
At its March 18 meeting, the board approved funding for Children's Legal Services and Affordable Housing grants at 20 percent below the previous year's funding.
The Foundation anticipates further cuts in grant program funding in the 2011-12 and 2012-13 grant years.
"These funding challenges, while daunting, are temporary," said Foundation Executive Director Jane Curran. " Once interest rates return to pre-recession levels, the Foundation will restore funding to its legal aid grantees. In the interim, we will do all we can to address the funding gap."