The Recycling Fund Concept was conceptualized as a special allocation of money for the purpose of expanding child care services for preschool children of low-income parents who were or had been recipients of Aid to Families with Dependent Children in Mecklenburg County, North Carolina. In 1985, North Carolina's Child Care Resources Incorporated (CCRI) submitted a formal proposal to test the Recycling Fund Concept. The process of developing the evaluation is described. As part of the evaluation, an analysis of CCRI's waiting list of applicants for state-supported child care assistance was undertaken. The major objective of this analysis was to examine the employment profile and child care contingency plans and arrangements of the population of applicants who either: (1) applied for employment-contingent child day care from October 1, 1989, to September 30, 1990; or (2) were offered such child care over a 12-month period. Surveys of applicants and of those offering assistance were administered. Results that were based on frequency distributions of items on the surveys are presented. Findings are discussed in regard to the Recycling Fund Concept and larger issues of welfare reform. (RH)