This paper analyzes the effects of foreign aid on Palestine’s nongovernmental organization (NGO) sector.  Specifically, it explores how aid has positioned NGOs as actors within civil society and affected their capacity to represent local citizen interests and lead social change.                   Since the signing of the Oslo Accords, Western aid has poured into Palestine and drastically expanded the country’s NGO sector.  Foreign funders doubled donations to NGOs between 1999 and 2006, enlarging the sector to approximately 3,000 organizations (Turner and Shweiki 2014).  This proliferation of NGOs has been read by many as a strengthening of Palestinian civil society. Such an interpretation reflects dominant theories of NGOs, which see these organizations as the sine qua non of civil society.  NGOs are thought to promote citizen participation, mobilize opposition to authoritarianism and occupation, and bring about social and political change.  A more critical approach to NGO-ization, however, suggests that NGO sectors built primarily through foreign aid are more likely to maintain the status quo than to promote substantive change.  When NGOs rely primarily on aid to survive, they shift their accountability from citizens to donors and structure their programs in ways that lead to the measurable results demanded by funders rather than the radical change preferred by the grassroots.   This paper argues that foreign aid to Palestine’s NGO sector has distorted NGOs’ roles within civil society by constructing a bloated sector of professionalized NGOs that maintain clientelistic relationships with donors and are disconnected from the grassroots constituents they proclaim to serve.  Drawing upon data from interviews with NGO leaders and civil society activists in Palestine, the paper argues that the grassroots-based advocacy organizations that explicitly oppose the occupation of Palestine and promote meaningful civic participation have been sidelined by the large, aid-funded NGOs that, reflecting the agendas of their Western donors, accomodate rather than combat occupational forces.  Co-optation of NGOs by foreign aid reflects the sector’s dependence on foreign funds for survival.  In order to receive funding, NGOs must comply with bureaucratic application and reporting procedures and must demonstrate measurable outcomes in short-term increments.  The influx of foreign aid to Palestine, and the clietelistic relations it has created between foreign donors and local NGO recipients, has created frictions within Palestinian civil society. In addition to sidelining grassroots advocacy organization, aid has produced a regime of governance that reflects foreign logics and goals rather than local needs and aspirations.