Objective: The authors review and discuss challenges to funding the educational missions of psychiatry departments. Method: The authors conducted a literature search and also provide examples from their department and lessons learned from business organizations that are applicable to academic departments. Results: The authors discuss and analyze department funding streams, with emphasis on those applicable to education and suggest a number of strategies that flow from an analysis of costs. Conclusion: Departments are adjusting to environments of relative scarcity. The success of these adjustments will depend on departments' ability to understand their costs, control them, and develop alternative sources of revenue.