The North American Council on Adoptable Children (NACAC) released this report in response to recent calls for a return to institutionalized care for children. The response is based on NACAC's long-held position that: (1) every child deserves a family; (2) institutionalization is not an acceptable substitute for a family; and (3) many important, more cost-effective, and humane options to institutionalization have not been tried. The report notes that infants and young children, many with medical complications and physical and mental limitations due to prenatal drug exposure, comprise the fastest growing group of children entering substitute care. It is estimated that 375,000 of the infants born in 1988 had been exposed to drugs before birth. Many successful maternal health and prenatal care programs bring about favorable outcomes for mother and child. These programs offer a variety of options, such as client-oriented scheduling, integration of key services, and inclusion of the family in client services. However, a large and growing number of women do not have access to adequate public health services, prenatal care, or drug treatment. As for the call for a return to orphanages, it is maintained that long-term institutionalization in childhood leads to recurrent problems in later life. It is noted that a return to orphanages would be in clear violation of Public Law 96-272, the federal Adoption Assistance and Child Welfare Act of 1980. Contains 48 references. (LB)