Social service managers in performance-based and managed care contracting environments may be required to alter their agencies' personnel, financial management, and information technology practices to deal with the heightened financial risk present in these environments. This study describes the barriers that nonprofit child welfare managers faced, as well as the changes their agencies made, in these three areas of organizational functioning while adapting to a performance-based, managed care contracting environment. It reports on the results of analyses of in-depth interviews with administrators and foster care supervisors from nine nonprofit agencies either operating under or in the process of transitioning to a performance-based, managed care contract with the state of Michigan's public child welfare agency.