This paper presents findings of a study that investigated educational change within two innovative schools experiencing financial crisis. Data were derived from interviews with 14 educators (principals and teachers) and from observations of school board meetings. The two schools were: (1) the Team Academy, a nongraded K-6 school; and (2) the Opportunity Alternative High School, a nontraditional school for at-risk students. The schools were receiving $25,000 in change funds annually from Ohio Venture Capital 5-year grants. An operating levy defeat and a community committee's recommendations threatened to close both schools. The program's focus on improving teaching and learning was seriously hindered by lowered school morale; parent, student, and staff uncertainties about the future; lack of community knowledge and appreciation; and bureaucratic procedures and lay directives that overpowered educational expertise. District procedures and the financial crisis replaced the goals for educational change and student learning. (Contains 28 references.) (LMI)