The Federation responded to increasing deinstitutionalization of persons with severe mental illness from state psychiatric hospitals by helping to establish community day treatment and rehabilitation facilities. We worked to pass state legislation establishing Community Boards for Mental Health and Mental Retardation.

The Federation formed a Mental Retardation Development Project to plan overall community services for those with developmental disabilities, which led to the creation of the Board of Mental Retardation, the Association for Retarded Citizens (now, The Arc) and the passage of the first specially designated tax issue passed with over 70 percent of the vote.