Two theoretical perspectives are combined to explain the pattern of administrative offices in public and private institutions of higher education. The first perspective, resource dependence, is used to show that the need to ensure a stable flow of resources from external sources of support partially determines administrative differentiation. The second perspective, institutionalization, emphasizes the common understandings and social definitions of organizational behavior and structure considered appropriate and nonproblematic and suggests conditions under which dependency will and will not predict the number of administrative offices that manage funding relations. The results of the analyses indicate that dependence on nontraditional sources of support is a strong predictor of administrative differentiation and demonstrate the validity of integrating these two theoretical perspectives.