Nationally, rural students represent about a quarter of all students attending public school; nearly a third of all schools are located in rural areas. Those rural schools and students have a number of unique characteristics and needs. For example, the smaller size of many rural schools and districts can sometimes lead to per-pupil expenditures that are higher than those of larger urban and suburban schools. Higher costs--in some cases, merely the perception of higher costs--are also the result of distance or isolation, high rates of poverty, lack of a social service infrastructure, and higher utility costs. Complicating the issue, small rural school districts frequently have a low or declining tax base. As a result, they must often operate with limited local funding for education. School employees, parents, students, and community members can organize and work toward changing state school finance systems so they will provide a fair and adequate distribution of funds. At the same time, schools and districts that strive to maintain democratic school governance and provide high-quality services and learning opportunities for all children must find ways to work within the constraints they currently face and to be creative in maximizing the efficiency of available resources. More so than ever before, rural districts must work with other districts as part of regional or local consortia to help reduce the costs of everything from paper and insurance to electricity and diesel fuel. They must create an environment in which everyone--the school board, administration, and staff--is working to cut costs and build up long-term financial stability. And they must look to their communities to help offset operational costs through school-business partnerships. This article provides strategies that can help rural school districts meet the challenges posed by their small size and diminished fiscal capacity. (Contains 3 online resources.)