With the founding of the People’s Republic in 1949, private welfare institutions and orphanages across the country were either closed or appropriated by the state, which sought to monopolise institutional care for orphaned children. Since then, hundreds of unauthorised, grassroots orphanages, mostly run by religious organisations, have developed in response to local need in relatively rural and underserved parts of China. Until 2013, when a fatal fire broke out at one such orphanage, these homes were technically illegal, openly tolerated, and generally unsupported by the state. Based on empirical fieldwork, this chapter examines the development of this sector, including the ambiguous legal status of private orphanages and the evolving nature of negotiations between local state actors and unauthorised homes, negotiations that were frequently complicated by the context of historically strained relations between religious groups and the state. The case studies presented demonstrate the impact of the lack of state supervision and support on the children resident in such homes, in terms of their access to basic entitlements and adoption prospects. The studies also shed light on the state’s “one eye open, one eye closed” approach to unauthorised-but-tolerated groups, an important local mode of informal regulation in modern China.