This thesis looks at New Zealand charities and their role within the mixed economy of welfare since the introduction of the contract culture in the late 1980s. Interviews with 11 charity workers across 8 different charities were conducted. It is a mixed methods research design which combines grounded theory analytical methods with a comparative analytical strategy of engaging with Milton Friedman’s conception of liberalism. This thesis argues that how charities cope, and the tensions they experience in the contract culture are an unintended consequence of the failure of the implementation of the ideal neoliberal free market. It is important to understand the significance of the failure to implement a free market as it explains why charities still struggle with their autonomy. Finally, recommendations are made for the removal of government paternalism and intervention in the contracting process to provide a more competitive market. This would enable the implementation of a successfully cost-effective and innovative contract culture.