This book is the seventh Children's Defense Fund report on major problems facing American children at risk of placement or already placed out of their homes. The findings are based on a survey of child welfare and probation offices in a stratified random sample of 140 counties (27 with populations over 300,000, and 113 with populations under 300,000); a national survey of out-of-state placement policies; an in-depth examination of the child care systems of seven states; and detailed analyses of federal legislation, regulations, funding patterns, program administration, and program innovations. In addition to its recommendations for reforming the state and federal role, the report describes a range of successful programs and strategies that offer detailed guidelines for advocates. The report is organized in three major sections: Part I describes the destructive forms of public neglect often resulting in the isolation of children from their families and from the purview of responsible public agencies; Part II takes a comprehensive look at the state and federal role concerning children at risk of or in out-of-home placement; Part III is concerned with how to change the ways child care systems now respond to children without homes and the families of these children. (Author/SS)