Contemporary school administrators play a daunting array of roles. They must be educational visionaries and change agents, instructional leaders, curriculum and assessment experts, budget analysts, facility managers, special program administrators, and community builders. New expectations for schools--that they successfully teach a broad range of students with different needs, while steadily improving achievement for all students--mean that schools typically must be redesigned rather than merely administered. It follows that principals also need a sophisticated understanding of organizations and organizational change. Further, as approaches to funding schools change, principals are expected to make sound resource allocations that are likely to improve achievement for students. Knowing that this kind of leadership matters is one thing, but developing it on a wide scale is quite another. What do we know about how to prepare principals who can successfully transform schools? What is the current status of leadership development? And how might states systematically support the development of leaders whose schools are increasingly successful in teaching all students well? This report addresses these questions using data from a nationwide study of principal development programs and the policies that influence them. In 2003, with funding from The Wallace Foundation, the Stanford Educational Leadership Institute, in collaboration with the Finance Project, began to study how exemplary preparation and professional development programs develop strong school leaders. The authors sought to determine whether some programs are more reliably effective in producing strong school leaders, and if so, why and how? What program components and design features do effective programs share? How much do these programs cost? How are they supported and constrained by policies and funding streams? (Contains 1 table, 2 figures and 3 footnotes.) [This paper was commissioned by The Wallace Foundation. For the main report, "Preparing School Leaders for a Changing World: Lessons from Exemplary Leadership Development Programs. School Leadership Study. Final Report," see ED533003.]