How we Fund our Granting
The Foundation’s primary revenue source is from interest on lawyers’ trust accounts (“IOLTA”). IOLTA is paid by financial institutions to the Foundation on all pooled or mixed trust accounts maintained by lawyers practicing law in Manitoba.
The Legal Profession Act of Manitoba requires Manitoba lawyers to maintain one or more trust accounts to receive all money held in trust for clients. Such mixed or pooled trust accounts must be interest-bearing. The funds held in those trust accounts include deposits held pending the sale of a property, mortgage proceeds, estate assets held until final distribution to beneficiaries, or a retainer to be applied eventually to lawyers’ fees and disbursements. Lawyers have the option of placing client trust money into separate interest-bearing accounts; however, in many cases, it is not cost-efficient to do so because the administrative costs would exceed the interest which would be earned on the account.
Lawyers are required to instruct the financial institutions where trust accounts are maintained to remit the net interest earned to the Foundation. Before the establishment of the Foundation, all such interest was paid to the Minister of Finance and placed in the Manitoba Government’s Consolidated Fund.
The Foundation negotiates with each financial institution directly to agree upon an interest rate arrangement for the interest paid on lawyers’ trust accounts, always seeking favourable interest rates and service charges arrangements with the banks and credit unions, taking into account the significant balances held in lawyers’ trust accounts and the value of the work done by the Foundation’s grantees to benefit the public. The revenue from IOLTA is highly variable because it depends both upon the level of balances held in the trust accounts from time to time and the interest rates in effect at any given time.
While the IOLTA revenue represents the greatest proportion of the Foundation’s revenue, the Foundation also receives revenue from its investments.