This study examines factors that differentiate health service organizations that were successful applicants for a grant program to initiate primary-care services from a matched sample of organizations that did not apply for the program. Factors that were different between the two sets of organizations include the attitudes and behaviors of physicians in the local community, previous success of the organization in obtaining grant support, and employee perceptions of selected organizational and grant program characteristics. These findings suggest that factors both internal and external to the organization are influential in decisions to initiate activities sponsored through grant programs. Implications of these findings for the design of state block grant programs are discussed. © 1983 Human Sciences Press.