Voluntas (2006) 17:211–220 DOI 10.1007/s11266-006-9018-0 ORIGINAL PAPER “We Actually Trust the Community:” Examining the Dynamics of a Nonprofit Funding Relationship in New Zealand Sally Shaw · Justine B. Allen Published online: 27 September 2006 C  International Society for Third-Sector Research and The Johns Hopkins University 2006 Abstract Funding relationships in nonprofit management are increasingly defined by a philosophy of rational management, characterized by measurement of outputs and bench- marking, which represents an audit culture system (Burnley, Matthews, & McKenzie, 2005). There is concern that these approaches are constantly undermining the mission of community service nonprofit organizations (Darcy, 2002). In this research, we analyzed the management of funding relationships by examining dynamics within a nonprofit funding relationship in New Zealand. Through focus groups we explored the relationship between 17 representatives from nonprofit organizations and four Board members of a funding Trust. The management of this funding relationship was characterized by an appreciation of the diverse nature of nonprofit organizations, a balance between trust and control, and communication. We suggest that elements of these dynamics could be incorporated into nonprofit funding relationships in order to challenge an over-reliance on audit culture systems, and to re-establish relationships characterized by interaction between nonprofit organizations and their funders. Finally, we call for future research in this area. Keywords Nonprofit . Trust . Control . Communication . Organizational knowledge . Service delivery . New Zealand Introduction Over the last 30 years, the nonprofit social service delivery sector in countries such as the United States, Australia, the United Kingdom and geographical zones such as the European Union has undergone rapid and substantial change (Darcy, 2002). Many countries from the Organization for the Economic Co-operation and Development (OECD) have embraced changes that have been characterized by an increase in rational management philosophy. This philosophy suggests that the apparently rational and transparent nature of the commercial S. Shaw () · J. B. Allen School of Physical Education, University of Otago, PO Box 56, Dunedin, New Zealand e-mail: sshaw@pooka.otago.ac.nz Springer