Throughout the history of the United States, private associations and charity have supplemented -- and at times surpassed -- the government in caring for the most economically vulnerable citizens, improving the social and physical infrastructure of neighborhoods, and supporting cultural institutions. The American welfare state exists today, as it has for centuries, as a project of both public and private aid. Such interaction (indeed, cooperation) between the public and private sectors is not a new phenomenon, but the specific configuration of the interaction that has evolved and shifted over time. Factors such as economic growth, governance structures, and political ideology have defined and altered the relationship between both the public and private sectors and between the sectors and the citizens. For example, private settlement houses emerged as the dominant form of charitable urban-aid at the end of the nineteenth century, but in the 1930s the New Deal model of public aid and benefits replaced the settlement house model. In the 1960s the welfare state entered yet another phase when the government began granting public monies to private nonprofit organizations. The entry of direct public subsidy for private nonprofit activities, I argue, marks a significant turning point in the history of charity in the United States and of the American welfare state that had profound consequences for American cities.