The need to develop "family capital" (the attributes and skills that enable families to carry out their economic, social, and nurturing functions) in inner-city neighborhoods is the focus of this background briefing report. Part I of the report describes the characteristics and causes of distressed communities and their impact on families, and defines the concept of "family capital." Part II offers a brief history of more than 30 years of policies and programs to revitalize inner-city communities. Part III recounts the effort to reform services for low-income children and families and make them more community-based. Part IV details the new community-building initiatives in the public and private sectors and points to some continuing issues of debate in the community-building field. Part V describes how the family services field is rediscovering a focus on community. Finally, in part VI, suggestions are offered for building a stronger partnership between the community-building and family services fields around the idea of investing in family capital. An appendix lists and describes resources for financing and supporting comprehensive community initiatives. Contains 78 references. (TS)