Funding arrangements for Natural Resource Management (NRM) in Australia have undergone a number of changes in the last decade, including the transition from the Natural Heritage Trust (NHT) to the Caring for Our Country (CfoC) program (recently merged with Landcare to become the National Landcare Programme). It has been suggested that CfoC eroded some of the gains in regional autonomy, community engagement and goodwill made under the NHT. This article presents the results of research conducted with regional NRM bodies and community-based stakeholders in the Upper Murrumbidgee catchment, south-eastern Australia. It explores the impacts of the CfoC grants structure on NRM bodies and communities, and examines the practical responses of resource managers to funding constraints. The research demonstrates that the structure of NRM funding delivery under CfoC played a key role in shaping the strategic and operational activities of regional NRM bodies and community groups. In particular, the short-term, single-issue focus of the program placed pressure on collaborations between regional NRM bodies and other groups, and could inhibit strategic and integrated approaches to NRM. At the same time, however, NRM planners and community stakeholders have actively managed the limitations of the CfoC structure to optimise catchment outcomes for communities and the environment.