Annual Report to the Membership of the Delaware Bar Foundation
June 30, 2014
Celebrating Serving the Delaware Bar For Over 33 Years
Delaware Bar Foundation Overview
The Delaware Bar Foundation was incorporated in 1981 and celebrated its 33rd anniversary in FY2014. Since its creation, the Foundation’s charter and structure have remained largely unchanged. The Foundation Board, originally 9 members, was increased in 2000 to 12 members. Board members are either appointed by the Chief Justice of the Supreme Court, appointed by the Delaware Bar Association President, or elected by the Bar Association membership. The Foundation President is elected by the Board of Directors. The Foundation’s current Board members are: William H. Sudell, Jr. (President), Crystal L. Carey, Ryan C. Cicoski, Justice Randy Holland (Delaware Supreme Court liaison), Kathi A. Karsnitz, Elizabeth M. McGeever, Jenness Elizabeth Parker, David N. Rutt, Laurie Selber Silverstein, Benjamin Strauss, and Hon. E. Norman Veasey. The Delaware Bar Foundation would like to thank Geoffrey Gamble and Thomas P. Sweeney, whose terms expired on June 30, 2014, for their dedication and years of service to the Foundation. The Foundation staff includes Melissa Flynn (Executive Director) and independent contractor, Wendy Fish (Finance Manager/Accountant).
The Foundation’s mission, expressed in its charter, is a broad directive to improve the administration of justice, to enhance public respect for the rule of law, to foster knowledge of citizenship rights and responsibilities, and to promote study and research in the field of law. Of critical importance is the need to provide funding for civil legal services for the indigent, added to the Foundation’s mission in 1983 when the Delaware Supreme Court transferred certain administrative duties of Delaware’s IOLTA Program[1] to the Foundation.
The Foundation has four active committees: Finance (which now oversees Banking/IOLTA as well), Endowment/Membership, Programming and Governance. The Finance Committee reviews the financial stability of the Foundation and assesses the IOLTA income for each year. A review of the Foundation’s finances appears at the end of this report. In addition, the Finance Committee oversees lawyer participation in the IOLTA Program, and development of strong relationships with banks that participate in the IOLTA Program. The Endowment/Membership Committee seeks to increase participation in the Foundation, both in membership and contributions to its endowment fund. The Programming Committee reviews and recommends potential programs for Foundation involvement. The Governance Committee addresses issues relating to the Foundation’s operations and organizational structure.
The IOLTA Program
The Foundation continues to administer the IOLTA program, established by the Delaware Supreme Court in 1983, to provide funding to Delaware’s providers of civil legal services for the indigent. Administering the IOLTA Program requires working with participating banks and lawyers/law firms, tracking IOLTA accounts, watching interest rate adjustments and fluctuations in the market, analyzing bank reports, and ensuring that the banks participating in the IOLTA program offer rates on their IOLTA products that are at least comparable to their rates offered on other, similar bank products.
On June 10, 2010, the Delaware Supreme Court entered an order amending Rule 1.15 of the Delaware Lawyers’ Rules Of Professional Conduct, as it relates to its IOLTA program, to make participation mandatory and to require that IOLTA funds be maintained in financial institutions that provide so-called “interest rate comparability” to IOLTA accounts. Interest rate comparability means that the interest rate payable by financial institutions for IOLTA accounts must be comparable to rates paid by the same institution on its other accounts with similar attributes. Delaware was the 43rd jurisdiction to convert its IOLTA program from optout to mandatory status and the 33rd jurisdiction to adopt interest rate comparability.
The Court amended Rule 1.15 to mandate that lawyers who hold IOLTA-eligible funds maintain all those funds in IOLTA accounts. Participation by Delaware lawyers is now required, not optional, with a limited ability of the Bar Foundation to exempt accounts which cannot be expected to generate enough interest to cover certain account fees. As a result of this rule change, Delaware’s number of IOLTA accounts has increased by more than 40%, from 619 accounts in 2009 to 889 accounts presently.
As a consequence of the mandatory nature of IOLTA and the rate comparability component of the new rule, the Foundation Board recommended, and the Court approved, a substantial modernization of the IOLTA Program, including a new IOLTA software data management system that allows the Foundation to track, for the first time, lawyer IOLTA participation and bank compliance with the new IOLTA rules. The costs associated with this effort increased the Foundation’s operating expenses relating to its administration of IOLTA. The Foundation is grateful that the Court agreed to reimburse it for the software costs related to this modernization.
IOLTA accounts may only be maintained at “eligible” financial institutions (i.e., those which offer interest rate comparable IOLTA accounts). As the Court’s designated administrator of the IOLTA program, the Delaware Bar Foundation certifies eligible institutions and maintains a list of those financial institutions that are eligible to hold IOLTA accounts on its website, www.delawarebarfoundation.org. Below is the eligible financial institution list which appears on the Foundation’s website.
IOLTA Eligible Financial Institutions - The following financial institutions have been certified by the Foundation as eligible to participate in Delaware’s IOLTA Program.
Prime Partner Banks
(List updated as of July 31, 2014)
Delaware’s Prime Partner Banks, listed below, have elected to offer a premium rate on IOLTA Accounts going above and beyond the rule requirements and partnering with the Foundation to ensure the success of the IOLTA Program.
First Shore Federal Savings and Loan
Fulton Bank, N.A., Delaware National Division
Midcoast Community Bank
IOLTA accounts maintained at Prime Partner institutions generate additional funds to provide civil legal services for Delaware’s neediest citizens. Please join us in extending a special thanks to these banks for their exceptional support of the IOLTA Program.
Other Eligible Financial Institutions
(List updated as of July 31, 2014)
The following institutions have also been certified as eligible to hold IOLTA funds in Delaware pursuant to the standards defined by Rule 1.15:
Applied Bank
Artisans Bank
Bancorp Bank
Bank of America
Bank of Delmarva
BNYMellon
Bryn Mawr Trust
Calvin B. Taylor Banking Co
Christiana Bank & Trust Co.
Citibank
Citizens Bank
County Bank
First National Bank of Wyoming
Franklin Mint Federal Credit Union
HSBC
M&T Bank
PNC Bank
Sussex County Federal Credit Union
TD Bank
Washington First Bank
Wells Fargo Bank
WSFS
When interest rates increase above the current level of 0-.0025%, the Foundation expects to see a substantial increase in IOLTA funding for civil legal services for the poor.
IOLTA Grants
The grantees receiving IOLTA funds during FY2014 recommended by the Foundation and authorized by the Delaware Supreme Court, are: Community Legal Aid Society (CLASI), Legal Services Corporation of Delaware (LSCD), and Delaware Volunteer Legal Services (DVLS). A grant also was given to Legal Help Link (LHL), a collaborative effort of the grantees to maintain a centralized intake system for callers with law-related questions and problems.
The IOLTA grants are made annually commencing July 1 of each fiscal year. From 1983 through 2013, the grants have totaled over 25 million dollars. While the Foundation was able to distribute $1.5 million in IOLTA grants for FY2007, it has watched the IOLTA dollars erode steadily over the last few years as a result of the economic downturn. As a result, the Foundation was able to distribute just $300,000 to the legal services agencies in each of FY2010 and FY2011, $400,000 in FY2012, and in FY2014, $800,000. The Foundation’s Board is pleased to announce that it has recommended and the Supreme Court of Delaware has approved $650,000 for distribution FY2015.
State Funding
Given the downturn in IOLTA funding during the last several years, the Foundation has actively sought alternate funding strategies to supplement the funds from the IOLTA program. Through its efforts, the Foundation has received $275,000 in previous years through a line item in the state’s budget, to be used for legal services for the poor. In FY2012, this amount was increased for the first time to $400,000. The Board is most pleased to report that the Foundation’s state funding allocation was increased in FY2013 to $600,000 and has been approved to remain at the $600,000 funding level for FY2015. The Foundation’s Board is grateful for the efforts made by many to help secure this additional funding, and to the members of the General Assembly who voted in favor of the increase in funding.
Programs
Consistent with its mission to foster knowledge of citizenship rights and responsibilities and enhance the public’s respect for the rule of law, the Foundation continued the support of exciting programs during FY2014. First, the Foundation, in partnership with area volunteers in bullying prevention, continues to support and oversee a website that pulls together all of Delaware’s materials and resources on bullying prevention, as well as local contact information, for students, parents, teachers and school administration officials. The website, www.deletebullying.org, is teen-focused and Delaware-based, but it also provides national websites on bullying prevention and teen support.
In furtherance of its efforts in bullying prevention education, the Delaware Bar Foundation has continues to provide partial funding request from the University of Delaware for a pilot program on bullying prevention to be implemented in a school district in Delaware. The presentation was made by Dr. Julie Hubbard, the Director of the University’s Clinical Science Doctoral Department in the Psychology Department, and an expert in the field of bullying prevention. Known as KiVa, the prevention program was created and tested extensively in Finland. The statistics gathered from the KiVa program demonstrate a statistically improved program over the Olweus Program, currently in use by the Delaware educational system and many other state educational systems. The pilot program has been implemented in the Red Clay Consolidated School District, in its 4th grade, for the 2012-2013 school year. Dr. Hubbard is continuing overseeing student clinicians who have collect and are analyzing the data from the program. Having examined the data from the past two years of program implementation, Dr. Hubbard believes it has been statistically more successful than the Olweus Program. With this positive data, the University of Delaware, working with the State’s Department of Education, intends to raise funds to implement the program statewide. According to the University of Delaware, Delaware is the first state in the nation to bring KiVa into the school system.
In 2012, the Delaware Bar Foundation partnered with Howard High School of Technology to provide their Legal Administrative Assisting Program’s student with placement in local law firms for job shadowing opportunities. This program was not continued in the 2012-2013 school year due to scheduling conflicts, but in 2013-2014 instituted a winter placement into law firms. The program will continue into the 2014-2015 school year.
In 2014 the Foundation provided funding to the Senior Lawyer Video Project. This effort, made possible by the work of the Senior Lawyer Committee of the Delaware Bar Association, captures the recollections of some of Delaware’s most prominent attorneys and judges. Videos previously created can be found on the DSBA.org website. All new videos will also be available on the Delaware Bar Foundation website.
This year also brought the Foundation’s involvement in the Mural Project in Family Court in Kent and New Castle Counties. These murals are created by children who have been involved in Delaware’s foster care program. The art will greet families entering the family court rooms and reflects the hopes, choices and challenges faced by youth in foster care. The positive messages within the mural include believing in yourself, education and overcoming obstacles. The Foundation is pleased to have been able to sponsor in full the Kent County mural and fund in partnership with other organizations a mural to be produced in New Castle.
The Foundation is also proud to support Liberty Day. In the fall of 2013, and 2014 the Delaware Bar Foundation together with the Delaware State Educational Association, did and will fund Liberty Day. This program provided all 8,039 fifth graders in the public school system with a pocket Constitution and their teachers received specialized curriculum to teach the students about our Constitution. This educational opportunity spreads the message of the founding of our country and provide the children with the knowledge of their rights and responsibilities as citizens of the United States of America.
Fundraising
In furtherance of the Foundation’s broader mission, the Foundation President directs an annual appeal letter each year to Delaware lawyers for Foundation dues and additional contributions. The response of the Bar always has been generous.
In 2002, 13 members of the Delaware Bar, working with the Foundation, created an endowment fund entitled “Legacy of Giving.” In addition, the Delaware Bar Foundation has established new categories of giving to recognize those who contribute substantially to the Foundation: 1) Serjeants-At-Law honors those who contribute gifts that meet or exceed $10,000; 2) Justice Partners honors those who contribute gifts that meet or exceed $5000; 3) Justice Fellows honors those who contribute gifts that meet or exceed $3000; and 4) Foundation Fellows honors those who contribute gifts that meet or exceed $1000. The Foundation wishes to express its gratitude to the following:
Checking with Wendy
Serjeants-At-Law [2]
Delaware State Bar Insurance Services, Inc.
Harvey Bernard Rubenstein+
Harold Schmittinger*
Karen L. Valihura
Justice Partners
Chesapeake Utilities Corporation
Skadden Arps Slate Meagher & Flom LLP
Justice Fellows
Bayard P.A.
William J. Martin, III
William H. Sudell, Jr.
Foundation Fellows
Anonymous Friend of the Foundation Hon. Andrew G.T. Moore II
Carol J. Antoff Regina Mullen
Victor F. Battaglia, Sr. Francis J. Murphy, Jr.
O. Francis Biondi Hon. Donald F. Parsons, Jr.
Jack B. Blumenfeld L. Vincent Ramunno
Edmund N. Carpenter II* Vivian L. Rapposelli
Mary E. Copper* B. Wilson Redfearn
DLA Piper LLP Nicholas H. Rodriguez
Laurence L. Fitchett, Jr. John F. Schmutz