This article presents research on the impact of welfare reform on 90 nonprofit organizations in Southeast Michigan. Utilizing a refined survey instrument, in-depth interviews and focus groups with agency executives and staff, and the analysis of agency documents, it assesses how the racial characteristics of agencies' client populations affected the organizational consequences of welfare reform. The study confirmed that welfare reform has affected the ability of nonprofit organizations to meet the increased expectations generated by recent legislation. These effects have been particularly pronounced among agencies serving a high proportion of racial minority clients.

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