The author examines management dilemmas experienced by small nonprofit social services agencies as they entered new service domains with the assistance of governmental funding. Miscalculations regarding service and management expectations were common, as were problems in meeting contractual reporting requirements. Agencies also overestimated the possibility of using existing client pools as referral sources for the new services and consequently experienced difficulties in recruiting clients for service provision. Contrary to concerns raised in previous studies of nonprofit agencies, entering into new service domains did not create clear conflicts with existing agency service missions. However, subtle shifts in programming emphases did occur in some agencies. The implications of these findings for the development of contractual relationships between government agencies and small nonprofit agencies are discussed.
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