Part of the growing impact of new liberal economic market rationality is an increasing demand of religious organizations to establish partnerships or contracts with the state. Deregulation and liberalization of (public) welfare services in Sweden has since the 1990s resulted in greater attention to civil society as a resource in welfare provision. While the previous state-based welfare model advocated financial solidarity and equal rights to welfare services, the new marked-based model is based on the idea of the individual's right to freedom of choice and accepts different individual financial capacities. From being advocates for a comprehensive welfare system equal for all, religious organizations are presently invited and enrolled as contracted parts of a system accepting inequality in welfare provision related to the financial capacity of the individual. Indications from previous research show that tensions between their identity and the implicit values of contractual relationships may lead to enforced limitation of the specific profile and qualities of religious organizations which at an initial stage was an important part of the distinctive value of their contribution as social agents, as perceived by both parties. A reduction of the religious organizations profile may be caused by e.g. a demand for professionalization of the contracted services, a demand for toning down the religious profile or a demand for accepting values in conflict with its core values. This paper discusses the short term and long term consequences for religious organizations identity and freedom by entering into partnership or contract with public authorities. One specific question is if these relationships are new forms of state-religion regulation? The paper build on results from the research project Welfare and Religion in a European Perspective (WREP) and a recent pilot study in Sweden analysing formal contracts and written agreements of partnership between religious organizations and public authorities.