The problem, "What makes the demonstration an effective technique for promoting the use of innovation," was examined in a pilot study of a sample of 30 projects funded by the National Institute of Mental Health as demonstration research projects. The projects were spread over the states of Illinois, Ohio, Michigan, Wisconsin, and Indiana. Each project prepared a mental health innovation for adoption by target organizations, or organizations where its use would be appreciated. The projects involved innovations in a wide variety of mental health areas--aging, alcoholism, crime and delinquency, emotionally disturbed children, mental retardation, rehabilitation of mental patients, and prevention of mental illness. Analyzed data consisted of proposals sent to the funding agency and other project documents, final reports, and responses from project participants about their experience. Responses were obtained by direct interviews at project sites. Evidence of adoption by target organizations aware of the demonstration was indicative of diffusion. Based on the findings it was concluded that widely divergent approaches to demonstration can result in diffusion of innovations, and that the amount of diffusion for each approach depended on how free project personnel were to perform their tasks. (Author/PT)