Since the mid-1980¡¦s, the delivery of social welfare services in developed countries has follwed a diversification trend. The method of ¡§government-institued, privately operated¡¨ social welfare services represnets one that has received higher approval and been used more widly. The ¡§government-instituted, privately operated¡¨method combines government and private resources to create social welfare service institutions that are otherwise less likely accomplished by either the government or the private sector alone. This should be a good policy of social welfare services, but in the wake of the differences in the position and role perspective of the two cooperating parties, division of labor between the government sector and the private sector and expectation and collateral interactions between the two parties show differences. Moreover, previous studies focused on the investigation into the interactions between the government and the private sector; they rarely dealt with how the service receivers in the ¡§government-instituted, privately operated¡¨ policy feel about the services. Third, previous studies also paid more attention to the discussion of the interactions between central government and nonprofit organizations at the national level. This study focueses on the interactions between local governments that are disadvantaged as far as resources available to them are concerned and regional small nonprofit organizations. This artcle is an explorative case research on ¡§A Family Workshop,¡¨ a ¡§government-instituted, privately operated¡¨ institution. The reseatcher conducted in-depth interviews on the Labor Bureau of Kaohsiung County government, Fire Phoenix Cultural and Educational Foundation, and the physically, mentally handicapped students in the workshop, and conducted related literature review so as to obtain depth discovery of the conducted related literature review so as to obtain depth discovery of the interactions between the three parties. Finally, the researcher put forth policy suggestions related with three aspects: government policy, assisting interactions, and support.