This is a case study of a state institution granted charter status in 1992 in exchange for capping its request for state funds. St. Mary's College of Maryland received widespread freedom from state procedural controls, including procurement, personnel, and some capital development processes. The state, however, retained its oversight of the institution's basic role and mission. The findings indicate a win-win for both the state and the college but caution that such a status should be extended only after careful consideration. (Contains 3 figures and 4 notes.)