This paper deals with the the role of the organizations of civil society in the restructuring of welfare states. The organizations of civil society have a recognizable role in all social regimes. Their development is a product of specific historical circumstances linked to ideological, political, social, cultural, and religious traditions. These traditions leave their trace on the legal framework of the activities, the role and the scope of the civil society sector. The paper offers accounts of the theories of the development of civil society and cautions as to their applicability to the Croatian situation. In the late 1990s, the development of civil society in developed countries regarding their social policies was faced with a number of challenges and a variety of critical trends were identified. In the light of the results of recent research, the paper looks into the usefulness of the above mentioned theories for the development of civil society in Croatia, as well as its role in the restructuring of the welfare state. The decentralization of the welfare state as the dominant trend cannot count on the capacities of the local government units. The social programmes are on the margin of local interests. The organizations of civil society in the social sphere have respectable resources only in a handful of major cities. The establishment of social councils as the new networks that would contribute to the linkage between the major partakers and to the build-up of the social capital at the local level, is one of the viable developments conducive to a feasible reform. Research results indicate a strengthening of the civil society organizations. Inspired by social entrepreneurship and their partnership with other participants, they can mobilize new resources and fortify the welfare state from below.