In the United States, the non-profit sector has consistently relied on federal, state, and local governments for a significant proportion of its funds and clients since the 1960s. Smith and Lipsky (1993) report that government financing often accounts for over half the income of non-profit social service agencies and that there are hundreds of contractual arrangements between public and private non-profit entities in any given state of the union. These arrangements reflect the unique type of welfare state operating through the political economy of the United States.