Due to the efforts of mental health consumer and advocacy organizations, there now exists a legislated community-based mental health policy for the treatment of children and adolescents with serious emotional disorders and their families. But the implementation of this policy has not met the intended legislative standards. Accordingly, this document reviews the causes of dissatisfaction with the de facto implementation of this policy, focusing on misallocation of mental health treatment funds; the need for a more thorough, ecologically oriented evaluation; intensity of services; and the efficacy of traditional forms of intervention. Promising new proposals and initiatives in research and evaluation of community-based services from the Family and Children's Services Branch of the Division of Biometry and Applied Sciences at the National Institute of Mental Health are cited. References are included. (TE)