Dobbins v. Legal Services Corporation - Questions and Answers about Foundation and Nonprofit Involvement
Dobbins v. Legal Services Corporation -
Questions and Answers about Foundation and Nonprofit Involvement
One hundred grantmaking foundations, public charities and non-profit organizations have filed a “friend of the court” brief in support of the plaintiffs in Dobbins v. Legal Services Corporation, a lawsuit seeking to overturn limits placed by Congress on private funds donated to nonprofit legal services organizations.
Q: What is the problem?
A: In 1996, Congress imposed a comprehensive set of restrictions on the activities of nonprofit legal services programs that receive federal funding from the Legal Services Corporation, or LSC. The restrictions bar these nonprofit organizations from providing civil legal assistance to many legal immigrants, challenging welfare reform laws, representing prisoners, lobbying, participating in agency rule-making, claiming court ordered attorneys’ fee awards, and filing class actions on behalf of low income clients and communities.
Of particular concern to grantmaking foundations, public charities and nonprofit organizations is a provision in the law that extends these restrictions to apply even to activities that the nonprofit legal services organizations finance exclusively with funds from sources other than the Legal Services Corporation. If a nonprofit legal services organization receives even one dollar in federal funding, this provision causes all of its private funds to become encumbered by the restrictions. The only way to avoid the restrictions is for a nonprofit legal services organization to allocate a portion of its non-LSC funds for the purpose of establishing and sustaining a distinct affiliate organization, housed in a physically separate facility, with separate staff and equipment. Although the two organizations may have the same board of directors, they must maintain physical and objective separation in these other respects. The affiliate organization can then engage in the activity otherwise barred by the restrictions.
Funding for legal services nonprofits is scarce, and thus legal services programs have found this separate affiliate option too costly and unworkable to be viable.
Q: Why is this case important to foundations, public charities and nonprofit organizations?
A: If the federal court upholds these restrictions on the use of private funds provided to nonprofit legal services programs, then Dobbins could provide a sanctioned method for Congress to limit the use of private funding made to a wide variety of organizations supported with both government and private funds, including, among others, museums, colleges, universities, social services organizations, and public broadcasting stations.
Imagine the Brooklyn Museum of Art being forced by the City of New York to show “controversial” art only in a separate off-premises exhibition space. Imagine a noncommercial television station being forced by the Corporation for Public Broadcasting to air privately funded editorial messages on a physically separate and distinct channel. Imagine researchers being required to conduct sensitive privately financed research in isolation from their former lab partners whose work is supported with government funds.
Public-private partnerships work, at least in part, because of the many advantages of collaboration. The challenged rule, and the possibility that it will be upheld by the courts, pose a significant threat to the viability of these partnerships in a wide variety of settings and across the full political spectrum. The rule deeply interferes with the philanthropic function.
Q: How can the lawsuit address the problem?
A: The lawsuit, filed in December 2001 in federal district court in Brooklyn, New York, seeks to overturn these restrictions placed on private funds. Plaintiffs include the New York Foundation, individual private donors, and several legal services programs that rely on a mix of LSC and non-LSC funds. The defendants are LSC and the federal government. The lawsuit was filed as a related case to a similar lawsuit already challenging the restrictions, Velazquez v. Legal Services Corporation.
Plaintiffs in both cases have jointly filed a motion asking the court to declare the restrictions unconstitutional and to bar LSC from enforcing them. In particular, plaintiffs argue that the costly requirement of physical separation imposes an undue burden on the First Amendment right a right that is possessed by grantmaking foundations and other private donors and by nonprofit legal services programs to allocate their own funds to purposes they select in their own discretion.
Once the district court issues its opinion, the decision is likely to be appealed, and may reach the U.S. Supreme Court.
Q: What is the purpose of the “friend of the court” brief?
A: The purpose of the brief is to advise the court on the important implications of the lawsuit for the philanthropic and nonprofit communities. The brief is submitted on behalf of foundations, charities, nonprofit organizations, and several leading philanthropic associations including the Council on Foundations and the Independent Sector.
or (212) 998-6720. More information is also available on the main Dobbins/Velazquez page.