Countries which have traditionally relied on residential care are now undergoing major transformations to their child care and social welfare policies, in order to move towards family and community based care options. Such transformations are rooted in the research-based evidence of the impact of institutionalization on a child’s development, vulnerability to abuse within residential care settings, and the institution's high operational costs. It is therefore of great concern that the use of residential care is increasing in developing countries with high rates of HIV/AIDS. Such projects are typically funded by foreign donors to the detriment of the local population, and pressure should be placed on the host governments to pursue policies of family based care rather than residential care. 

The use of residential care should be strictly limited to specific cases where it may be necessary to provide temporary, specialized, quality care in a small group setting organized around the rights and needs of the child in a setting as close as possible to a family, and for the shortest possible period of time. The objective of such placement should be to contribute actively to the child’s reintegration with his/her family or, where this is not possible or in the best interests of the child, to secure his/her safe, stable, and nurturing care in an alternative family setting or supported independent living as young people transition to adulthood. 

Where the separation of parents and child is long-term, the alternative care arrangement should be family based to give the child a sense of security, continuity, stability and belonging by providing certainty on where the child will live for the rest of childhood and who the child’s parents or legal guardians will be. Keeping siblings, cousins and close friends together should be an important consideration in placement decisions. Adolescents, who may find integration into a new family difficult, may benefit from placement in supported independent living arrangements. These arrangements should be fully integrated in the community to which the children belong, with a comparable standard of living. 

Any child in a residential care setting must have their needs assessed and planned for, to enable them to return to their families as soon as possible. If a child has become separated from her family in an emergency, documentation, tracing and reunification activities should begin urgently. If a child has been removed from parental care for her safety, support services should be provided to the parents in order to facilitate the return of the child. Children must be kept fully informed and involved in any plans for their care, and encouraged to maintain contact with known relatives where possible. 

Residential care services must adhere to stringent standards of documentation and care and be regularly monitored by protection workers to ensure the children have their safety, health, psychosocial, and educational needs met.

The literature in this section deals with examples of countries which are working to develop their child care policies away from using residential care to alternative family care options such as kinship care, fostering, and adoption.