Where a target group such as the mentally ill tend to use multiple and varied services over a long period of time, service coordination is often seen as the key to continuity of care. This article argues that coordination also has its perverse effects. To demonstrate, two types of community organizations (COs) working in mental health in the Canadian province of Québec are examined: alternative COs, which have their roots in community action and maintain few formal links with each other or with institutional resources; and transitional structures, COs which are developed with the cooperation of psychiatric professionals, are closely linked to hospitals and are often part of a tightly coordinated system of community services. With respect to access, continuity, programs, internal structure and flexibility, each type of community resource has particular strengths and weaknesses. In the first part of the article, these are described and compared. In the second part of the article, we examine the possible effects of Québec's new mental health policy on COs working in mental health. The policy seeks to create comprehensive systems coordinating all services at the regional level-including alternative organizations, transitional structures and public institutions. The imperatives of the complex planning process risk diluting or even eradicating the differences between the two types of mental health COs described earlier. The process may thus rob certain service users of the particular advantages they found in alternative COs. For those mentally ill who, by choice or by chance, remain marginal to the coordinated system, there may ultimately be no resources available at all.