The community placement of people with serious mental illness has focused on assimilation. The broad community, however, seems largely unwilling to support and include them. The result is programmes to help people maintain their community lives mainly through the support of formal mental health services. The social and economic development of ‘identity communities' of people with serious mental illness is an alternative model to assimilation. An identity community consists of people with shared interests, beliefs, experiences or needs which affect the identity of the participants and the cohesiveness of the group. Such communities can be economically sustainable and offer members more ways of having meaningful lives. Examples of this recovery-friendly approach are provided as a viable way of enhancing community support without additional expense.