BACKGROUND: Community Health Centers (CHCs) are a vital part of the health safety net, providing high quality care to underserved communities with complex health and social needs. Yet, despite their crucial role, CHCs operate on slim financial margins, relying in part on grant funding streams. Little is known about the role that grant requirements have in directing the functioning of CHCs. METHODS: We conducted qualitative thematic analysis, based on 56 semi-structured interviews of CHC leadership and staff in New York City. RESULTS: Three overarching themes described ways that CHCs are hampered by the designs and requirements of grant funding: 1) narrowness of available funding, 2) lack of access to operational funding, and 3) inability to utilize available funding to address workforce needs. CONCLUSIONS: Our analysis illuminates the tension between the weighty charge placed on CHCs as key pillars of the health safety net and the inflexible grant funding mechanisms available to sustain them. Restrictive funding limits CHCs' capacity to deliver comprehensive care and meet community needs.