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The introduction of competitive tendering and contracting and a lack of transparent funding processes has seen a move towards greater contestability of services in the nongovernment organization (NGO) sector. To ameliorate this situation requires a sound understanding of knowledge management (KM) practices. However, not all NGOs have been equally successful at embracing KM principles. The purpose of this paper, therefore, is to explore the KM challenges faced by New Zealand NGOs in the health and disability sector.

Using qualitative research methods, specifically interpretive case study research, the authors studied the KM practices of nine NGOs in the health and disability sector in New Zealand. Qualitative data were obtained from documents and semi‐structured interviews following a dramaturgical approach.

The findings suggest many barriers to successful implementation of KM in NGOs; some of the most important ones being related to organizational structure and culture. Specifically, tensions between local and national organizational branches, difficulty integrating volunteers and complex funding arrangements are key challenges faced by NGOs in the health and disability sector.

Existing literature suggests that volunteer turnover is a serious impediment to successful KM implementation. The authors' research suggests that volunteer integration, more so than turnover, is an issue. The research also reports on an underlying tension between commercialization and the inherent service culture of the sector. This paper makes recommendations for improved volunteer management and suggests that there is a clear opportunity for better KM systems and practices in the NGO sector.