Since its creation in 1991, the Peruvian Social Fund (FONCODES) has spent about $570 million funding micro-projects throughout the country. Many of these projects have involved the construction and renovation of school facilities, mainly primary schools in rural areas. FONCODES projects are driven by community demand and targeted using an index of "unmet basic needs." This paper analyzes the targeting and impact of FONCODES investments in the education sector between 1992 and 1998 focusing on the extent to which FONCODES has been successful in transferring resources to poor areas and households, and the impact of investments in school facilities on various educational measures. Data from FONCODES documents, the Peruvian census, and three national surveys were analyzed using a number of descriptive and econometric techniques. Findings show that FONCODES has reached poor districts and, to the extent that they live in these districts, poor households; and that households in districts receiving greater FONCODES education expenditures had bigger gains in school attendance for young children. There was no evidence that FONCODES affected the probability of students being at the right grade level, and only weak evidence that it decreased the average time it takes children to get to school. Lack of disaggregated data precluded analysis of impact on academic achievement and other measures of school quality. (Contains 44 references and 18 figures and data tables.) (SV)