Much existing scholarship on nonprofit organizations’ receipt of government funds appears to assume that there is something highly problematic about this relationship. Although rarely articulated in these studies, the concern about the negative effects of government funding turns on a view of nonprofits that privileges their private character. In this paper, rather than examining how public funds constrain private action, we inquire about how government deploys private organizations, via the mechanism of government funding, to secure a public good. Using a case study of the nonprofit child welfare sector in New York State, we theorize a deficit model of collaborative governance in which nonprofits have been deputized by the state to secure children’s social rights but do not receive sufficient resources to cover the costs of securing those rights. Then, we connect this theory to organization-level financial management practices that pose challenges to the nonprofits of both survival and service quality. This nonprofit organizational instability concerns the state insofar as it threatens the securing of individuals’ social rights.