How has direct funding affected southern NGO relationships with northern donors? What do such changes mean for north-south NGO links? How does it affect the people involved? Research by the UK-based International NGO Training and Research Centre (INTRAC) examines the impact of direct funding as an instrument for aid, in Bangladesh, Peru and Kenya. The study suggests that relationships between key players have been fundamentally transformed – from partnerships between northern and southern NGOs to southern NGOs acting as subcontractors for donor-defined services. Funding has also distorted the shape of civil society by increasing the number of southern NGOs at the expense of other civil society organisations.