This study analyzes the implications of government contract funding on the staffing pattern of a nonprofit agency, the Canadian Red Cross, Toronto Region. Also, the study explains the implications of the staffing pattern on services and on the organization of the agency. Staffing is one area that has not been addressed adequately in the literature on nonprofit organizations.The study builds on the major theories of government-nonprofit relations developed by Steven Smith and Michael Lipsky (1993) and Lester Salamon (1995). The results are interpreted in terms of these theories.