DATE: April 4, 2024

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QUESTION PRESENTED

Whether a recipient is permitted to provide legal assistance to Voluntary Organizations Active in Disasters (VOAD)1 to incorporate as a 501(c)(3) nonprofit organization under 45 C.F.R. § 1611.6—Representation of Groups

BRIEF ANSWER

A recipient is permitted to provide legal assistance under 45 C.F.R. § 1611.6—Representation of Groups—to VOAD to incorporate as a 501(c)(3) nonprofit organization, as long as the VOAD is eligible under other applicable law and regulations. When such eligibility has been determined, the recipient may use LSC Basic Field funds, LSC Disaster funds, or non-LSC funds if that funding source permits it.

BACKGROUND

The goal/purpose of a VOAD is to have local partners coordinate to ensure an effective response to a disaster. VOADs are nonprofit, nonpartisan forums where organizations share knowledge and resources throughout the disaster cycle— preparation, response, and recovery—to help disaster survivors and their communities.

National VOAD members are all non-profit organizations. The criteria to become an associate member of the National VOAD are:

¹The National VOAD organization website identifies all local VOADs across the nation. The local VOADs serve as forums of collaboration and cooperation between social services organizations so that all can activate quickly in the wake of a disaster to assist disaster survivors. Due to the increase in disaster-related activity, many new local VOADs are being developed (especially in regions that never had one in the first place). Partner organizations in a local VOAD typically include the American Red Cross, United Way, and hundreds of other local social services organizations.

1. Collaborative desire to grow and strengthen the VOAD movement;

2. Proven national disaster mission and capacity; and

3. Have had an IRS tax-exempt status for at least two years prior to membership application.

VOADs do not directly provide any type of direct assistance (whether it is legal or otherwise). They are vehicles for local social services organizations to collaborate so that they can provide their respective services in a more cohesive manner. For example, the East Gulf Coast Regional VOAD (East Texas/Gulf Coast Area) members have come together over the years to develop a tool where disaster survivors can apply for local assistance in one location. The social services organizations in the region then use the same tool to identify which organization will aid which survivor to prevent duplication of services. Members also use VOADs as forums to learn more about the different types of assistance each partner organization provides so that case managers at the social services organizations can refer disaster survivors to the correct programs. Legal Aid organizations have integrated themselves into the VOAD sphere to better serve disaster survivors.

A recipient approached LSC to ask whether the recipient could provide legal assistance to a VOAD to incorporate as a 501(c)(3). Our analysis follows.

APPLICABLE LAW

The LSC Act and LSC’s fiscal year 1996 appropriations legislation place several restrictions on recipients’ use of both LSC and non-LSC funds. The restrictions prevent recipients from using any funds (other than tribal funds) to assist some categories of potential clients (e.g., Part 1626—ineligible non-citizens), engage in some areas of representation (e.g., Part 1637—prisoner litigation), and undertake some types of legal action (e.g., Part 1617—class actions). See 45 C.F.R. Part 1610 regarding most restrictions on non-LSC funds.

The restrictions do not bar recipients from having any contact with those potential clients or from discussing those areas of representation or types of legal action. For example, 45 C.F.R. Part 1626 prohibits recipients from “provid[ing] legal assistance,” but allows recipients to conduct intake for and make referrals of non-citizens who are ineligible to receive legal assistance. 45 C.F.R. § 1626.3. The rule recognizes that intake screening and referring individuals to another provider for whatever reason, eligibility-related or not, do not involve the types of legal analysis or legal work covered by the statutory restriction on “provid[ing] legal assistance for or on behalf of” some non-citizens. Pub. L. 104-134, tit. V, § 504(a)(11), 122 Stat. 1321-50, 1321-53 (1996), as incorporated by reference thereafter through Pub. L. 105-119, tit. V, § 502(a)(2), 111 Stat. 2440, 2510 (1998).

The main sections of 45 C.F.R. § 1611.6 in question are paragraphs (a)(2) and (b)(1)(ii). The regulation states:

(a) A recipient may provide legal assistance to a group, corporation, association, or other entity if it provides information showing that it lacks, and has no practical means of obtaining, funds to retain private counsel and either:

(1) The group, or for a non-membership group the organizing or operating body of the group, is primarily composed of individuals who would be financially eligible for LSC-funded legal assistance; or

(2) The group has as a principal activity the delivery of services to those persons in the community who would be financially eligible for LSC-funded legal assistance and the legal assistance sought relates to such activity.

(b)

(1) In order to make a determination that a group, corporation, association or other entity is eligible for legal services as required by paragraph (a) of this section, a recipient shall consider the resources available to the group, such as the group's income and income prospects, assets and obligations and either:

(i) For a group primarily composed of individuals who would be financially eligible for LSC-funded legal assistance, whether the financial or other socioeconomic characteristics of the persons comprising the group are consistent with those of persons who are financially eligible for LSC-funded legal assistance; or

(ii) For a group having as a principal activity the delivery of services to those persons in the community who would be financially eligible for LSC-funded legal assistance, whether the financial or other socioeconomic characteristics of the persons served by the group are consistent with those of persons who are financially eligible for LSC-funded legal assistance and the assistance sought relates to such activity of the group.

The eligibility requirements set forth in section 1611.6 apply only to legal assistance supported by funds from LSC, provided that any legal assistance provided by a recipient, regardless of the source of funds supporting the assistance, must be otherwise permissible under applicable law and regulation.” Id. at § 1611.6(c).

ANALYSIS

Before determining financial eligibility, a recipient must screen a potential group client for eligibility under Part 1626 to determine whether the group is eligible for legal assistance.

Recipients may refer to Advisory Opinion
2016-003, which instructs recipients to utilize the same framework listed in Part 1611 for group eligibility, for information on conducting that analysis.

Generally, organizations forming a VOAD are composed of groups instead of client-eligible individuals. To qualify as eligible for LSC-funded legal assistance, a group that is not primarily comprised of persons who would be eligible themselves as individuals must be unable to obtain private counsel; have as a principal activity the delivery of services to low-income persons; and the legal assistance must relate to such service delivery activity. 45 C.F.R. § 1611.6. All the criteria set forth above must be met for the recipient to find the group eligible for LSC-funded legal assistance.

First, a recipient must determine whether the VOAD is able to obtain private counsel. Regional VOADs are not funded externally; rather, they are collaboratives of organizations that are active in disasters in their respective region. Regional VOADs typically are supported by membership fees, donated time, and donated resources. Depending on the region and how active the legal aid community is during disasters, legal aid organizations join the regional VOADs. When evaluating the resources of the VOAD, the recipient must consider the VOAD’s income and income prospects, assets, and obligations. If the recipient determines the VOAD is unable to obtain private counsel, the first prong is met.

Second, a recipient must determine whether the VOAD’s principal activity is delivering services to low-income persons. Local social services organizations collaborate so that they can provide their respective services in a more uniform/functional manner. While VOADs typically do not provide direct services, they provide services to the community that aids disaster survivors. Next, the recipient must evaluate whether that activity is for low-income persons. In addition to information provided from the VOAD about the income levels of those the VOAD intends to aid, a recipient may determine, based on the demographics of their service areas, that this factor is met.

Third, after determining that the group’s principal activity is delivering services to low-income persons, a recipient must evaluate whether the legal assistance the recipient would provide relates to the delivery of services for those low-income persons. Two years of tax-exempt status is required to become a member of a national VOAD. The recipient’s assistance would be helping VOADs establish tax-exempt status to aid disaster survivors. That constitutes legal assistance because the recipient must conduct a legal analysis that is tailored to the VOAD’s factual situation and apply legal judgment in interpreting the particular facts to advise the VOAD of whether they are eligible for tax-exempt status.

So, if the recipient has determined the VOAD will aid low-income persons in step two, a recipient reasonably could determine that establishing tax-exempt status relates to the delivery of services to low-income persons.
Accordingly, after evaluating all three prongs, if a recipient determines that a VOAD is an eligible group client under the requirements of Part 1611, the recipient may, provided that the representation is otherwise permissible, use available LSC funds to provide legal assistance to the VOAD. An activity which is permitted with the use of LSC funds would also be permitted using non-LSC funds, so long as that funding source permits it. Additionally, even if a recipient
determines that a VOAD is not an eligible client, the recipient may, provided that the representation is otherwise permissible and the funding source permits it, use available non-LSC funds to provide legal assistance to VOADs.

WILL A. GUNN

Vice President for Legal Affairs and General Counsel

STEFANIE K. DAVIS

Deputy General Counsel for Regulations and Ethics Officer

ELIJAH JOHNSON, JR.

Assistant General