ORIGINAL PAPER What Does China’s Twin-Pillared NGO Funding Game Entail? Growing Diversity and Increasing Isomorphism Yi Kang 1 Published online: 22 January 2019 Ó International Society for Third-Sector Research and The Johns Hopkins University 2019 Abstract Two trends are gaining prevalence across China: (1) NGO needs for funding in order to survive and (2) the transformation of the government and private foundations into major NGO donors. This study explores grassroots NGOs’ experience with the government’s purchase-of- services contracting and private foundations’ grant schemes in Shanghai, Beijing and Sichuan. The research findings show that two opposite effects of the funding game are simultaneously felt: growing space for diversity and increasing isomorphic pressures. The two donor types have jointly created a result-driven and institutionalized environment in which NGOs easily lose sight of their missions and uniqueness. Nonetheless, despite finding their options extremely limited, NGOs adopt constantly evolv- ing, multifaceted resource strategies. Keywords Non-governmental organization Á Government purchase-of-service contract Á Private philanthropic foundation The Changing ‘Ecology of Opportunity’ for Chinese NGOs Over the last three decades, non-governmental organiza- tions (NGOs) 1 in China have experienced substantial changes. In the late 1990s, a substantial number of NGOs initiated by citizens emerged in a variety of areas (Deng 2015), breaking the monopoly of government-organized non-governmental organizations (GONGOs). Additionally, NGOs have continued to grow, despite various obstacles (He and Huang 2015). The devastating Wenchuan earth- quake further prompted NGO participation in public affairs. In recent years, the ‘ecology of opportunity’ (Hsu and Jiang 2015, p. 100) for Chinese NGOs has changed significantly. After decades of exhibiting tight control, the govern- ment is embracing neoliberal thinking on service contracts in governance, creating a more congenial environment for NGOs (Cho 2017; Gao and Tyson 2017). Following the switch to a market-based economy after 1978, China experienced economic transition and urbanization simul- taneously, putting extreme stress on existing models of the delivery of public goods and services (Saich 2008; Teets 2012; Jing and Gong 2012; Cho 2017). Meanwhile, Deng’s ‘small state-big society’ reforms emphasized streamlining the party-state apparatus and envisioned the rise of inter- mediary social organizations to assist with social welfare (Yang 2004; Howell 2004; Teets 2012). After the leader- ship transition from Jiang Zeming to Hu Jintao, the 16th CCP Congress in 2006 and the 17th in 2007 both high- lighted the mission to strengthen social organizations and engage them in serving society (Jing and Gong 2012). A dual administration was installed to provide ‘a more & Yi Kang yikang@hkbu.edu.hk 1 Department of Government and International Studies, Hong Kong Baptist University, Kowloon Tong, Kowloon, Hong Kong 1 ‘Non-governmental organization’ is used in this article to mean social organizations that are organized by citizens and that are active in the civic sphere. Although this definition is loose and there is no consensus on what constitutes an NGO in China, this article avoids the debate and focuses instead on how policy changes affect the broad group of local civic organizations, regardless of their distance from the government. Private foundations are also NGOs, but they are considered a separate group here, given their distinct resources, mission and practices. 123 Voluntas (2019) 30:499–515 https://doi.org/10.1007/s11266-018-00085-1