This study applied a systems-based theoretical framework for analyzing community functioning to investigate differences in the functioning of a black and white community and to determine whether apparent deficits in the black community may be attributed to institutional racism. Data consisted of an inventory of existing community resources and a survey among resource providers and users in each community. Results indicated that: (1) respondents in both communities expressed satisfaction with their community; (2) black community respondents reported more deficits in service resources (a perception that was consistent with the inventory data); (3) there were significant differences between the communities in reported resource availability, resource utilization, problem solving processes, and influence channels; and (4) black community respondents relied more on informal, internal community processes, while white community respondents relied more on formal community mechanisms and external channels. The results supported the hypothesis that community functioning is influenced by the racial structure of the community. Deficits in the black community seemed to be attributable to the differential nature of the black versus the white community's resource exchange with the larger social system, suggesting the presence of institutional racism. (Author/MJL)