As government agencies search for ways to work effectively with nonprofit organizations, there is a growing need for strategies that resolve the long-standing tension between the public sectors need for accountability and the nonprofit sectors desire for autonomy. This article considers the way a state agency in Oklahoma worked toward resolving this tension by restructuring its contracting system with nonprofit organizations. Different from both fee-for-service systems that require heavy auditing and simple outcome funding that can distort the complexity of programs, Oklahomas milestone contracting specifies a series of distinct and critical client achievements and confers payment for this set of collaboratively defined results. This approach to public-nonprofit contracting represents a promising way to achieve public accountability while protecting the autonomy nonprofit organizations need to deliver programs that meet local needs. This publication is Hauser Center Working Paper No. 6. The Hauser Center Working Paper Series was launched during the summer of 2000. The Series enables the Hauser Center to share with a broad audience important works-in-progress written by Hauser Center scholars and researchers.