This chapter provides a broad overview of government funding policies, first tracing the rise of government support for nonprofits in the post-World War II period that contributed to changing the sector from a small cottage industry into a significant economic force. It then discusses the conceptual underpinnings and the prevailing theory of the government-nonprofit relation- or partnership. However, there is not necessarily consensus on whether or not this partnership has turned out to be a good thing for nonprofits. This is followed then by a review on the literature on the drawbacks of government support on nonprofits, including government dependency, loss of autonomy, mission deflection, and bureaucratization. The chapter concludes with a general assessment of the evidence, suggestions for additional conceptual considerations to come into play to help shape the debate going into the future, and a brief outlook of possible implications of the Trump presidency.