In the early 20th century, Asian Americans and Latinos organized along national origin lines and focused on assimilation; By the 1960s and 1970s, community organizers from both groups began to form panethnic community service organizations (CSOs) that emphasized solidarity. I argue that focusing on the rise of panethnic CSOs reveals an underappreciated mechanism that has mobilized Asian Americans and Latinos—the welfare state. The War on Poverty programs incentivized non-black minority community organizers to form panethnic CSOs to gain access to state resources and serve the economically disadvantaged in their communities. Drawing on extensive archival research, I identify this mechanism and test it with my original dataset of 818 Asian American and Latino advocacy organizations and CSOs. Leveraging the Reagan budget cut, I show that dismantling the War on Poverty programs reduced the founding rate of panethnic CSOs. I further estimated that a 1% increase in federal funding was associated with the increase of the two panethnic CSOs during the War on Poverty. The findings demonstrate how access to state resources forces activists among non-primary beneficiary groups to build new political identities that fit the dominant image of the policy beneficiaries.