Faculty and staff development (FSD) programs in the California community colleges currently receive funding under the California Assembly Bill (AB) 1725, which has distributed approximately $5 million each year since 1989 to districts on an enrollment-based formula. A study was conducted which surveyed FSD programs statewide to assess program outcomes and then investigated programs which represented extreme cases. The study sought to develop a grounded theory about the factors that influence FSD program outcomes. For five sites, program and college documents were reviewed, semi-structured elite and participant interviews were conducted, program activities were observed, and case studies were created. The study found that the AB 1725 FSD Fund was an inefficient and ineffective delivery system to achieve FSD outcomes in the cases studied. State program policy, combined with institutional and program factors, have created programs which have difficulty achieving any one focus and the funds are dissipated yearly with little or no measurable impact. The study produced a theoretical model derived from the site data which indicates that FSD programs with a high perception of program ownership by faculty combined with strong administrative support were related to higher levels of innovation in instruction and professionalism. (Author/AC)