In order to broaden its sources of funding, a child care resource and referral agency must follow several steps. First, the agency must identify its customers, who are typically children, parents, providers, employers, and the government. Next, the agency must define its functions, which may include advocacy; education and training; day care; public relations; resource and referral; and technical assistance. Finally, based on its lists of customers and functions, the agency must determine possible sources of funding. These may include government, foundations, employers, provider groups, and the agency itself, through the fees it charges for services. The establishment of a diversified budget has three benefits: (1) freedom, because no one funding source has a controlling interest in the agency; (2) flexibility, because an independent agency has the ability to respond quickly to the needs of the community; and (3) safety, because the loss of any one funding source will not destroy the integrity of the agency. There are some problems with mixed funding. First, it requires more work on the part of the agency executive, who must attend to multiple funding sources instead of a single source. Second, careful fund accounting is crucial when one deals with several funding sources. (BC)