Project "FAIR" identified and evaluated alternative funding mechanisms for allocating state resources to support programs and services for at-risk youth. Information was gathered through the following activities: (1) two national surveys; (2) the development of a classification system for programs and the identification of prototype programs; (3) a cost study; (4) the simulation of funding alternatives; (5) identification of procedures for integrating funding alternatives into existing state school finance programs; and (6) an evaluation of state funding options. State policymakers should consider the following choices: (1) the target group; (2) service delivery systems; (3) expenditure per student; (4) participation standards; and (5) outcome measures. The following conclusions are presented: (1) programs are in an evolutionary stage; (2) social and economic costs demand immediate action to provide funding; (3) using a fiscally equalized approach may not assure that all eligible students receive adequate services; and (4) an "index of need" approach appears to be the best alternative for targeting resources on those districts with the greatest need; and (5) local creativity should be encouraged. Recommendations for further research are made. Statistical data are presented in 40 tables. The following materials are appended: (1) a list of 136 references; (2) two glossaries; (3) the survey questionnaire; (4) an explanation of the classification system; (5) one table of statistical data; (6) a description of the simulations; and (7) the evaluation criteria. (FMW)