Using the case of Cobalt, a former silver mining town in Northern Ontario, Canada, we trace the transition from social funding as a feature of the welfare state to social funding based on application, adjudication and award. We identify a process in the community development arena, whereby local governments, community organizations and community members are increasingly enmeshed in the bureaucratic and socially disengaging processes of proposal-writing. Cobalters regard aspects of this downward deflection of the locus of economic responsibility as fairer, and more transparent, than the previous funding regime. We show how a local moral economy and understanding of citizenship based on an ethic of caring has contributed, in a counterintuitive way, to an interim outcome of more public services. At the same time, the current pursuit of development funds via proposal is undermining the practices of civic engagement which have allowed the town to remain distinct for the past century.