KIDS COUNT, a project of the Annie E. Casey Foundation, is a national and state-by-state effort to track the status of children in the United States. By providing policymakers and citizens with benchmarks of child well-being, KIDS COUNT seeks to enrich local, state, and national discussions concerning ways to secure better futures for all children. At the national level, the principal activity of the initiative is the publication of the annual "KIDS COUNT Data Book," which uses the best available data to measure the educational, social, economic, and physical well-being of children. This Essay is derived from the 2006 "KIDS COUNT Data Book." This year, the 17th annual "KIDS COUNT Data Book" essay looks at a critical component in the continuum of child-care options that millions of families, especially low-income families, use. It is a form of child care that referred to as "family, friend, and neighbor care," which is offered in a home-based setting outside a child's own home, by both regulated and unregulated providers. It is also referred to as home-based and family-based care. Many studies highlight the positive features of home-based settings, such as low child-to-adult ratios and close connections and positive interactions between caregivers and children. However, they also raise some important health and safety issues, as well as questions about the ability of some family, friend, and neighbor providers to effectively nurture children's physical, cognitive, and social development. Family, friend, and neighbor care is the only non-parental setting that many pre-school children--particularly those in low-income communities--experience before kindergarten. Therefore, trying to improve it is an idea that not only makes good sense, but one with significant potential to help narrow the school readiness gap between low income and more affluent children. Across America, there is a growing recognition that more needs to be done to help family-based providers. Several federal programs provide support to help improve the quality of family, friend, and neighbor care. These include financial assistance such as the Child Care and Development Fund and the Child and Adult Care Food Program, which enables providers to offer healthy meals and snacks to children in their care and offers home visits from nutritionists who are well versed in child development. Nationally, more than half of the states now fund initiatives to improve the quality of care in family, friend, and neighbor settings; and several new networks of practitioners, policymakers, and researchers interested in this issue have been established. In addition, there is growing support from a number of national and local foundations and organizations. (Contains 33 endnotes.) [For "KIDS COUNT 2005 Essay," see ED485938.]