Recent years have seen accelerated processes of decentralization and devolution of social services from central government toward local authorities and from them to non-profit organizations (NPOs). This article describes a case study of the process of transition of power from a local authority to a NPO and the outcomes of this transition on public policy making. The findings presented in the article are based on a qualitative analysis of documents over a period of 7 years (1999–2006) in a large local authority in Israel and its relations with a NPO which provide services for the elderly.