In 2004, nine country programs involved in PROLINNOVA (Promoting Local Innovation in ecologically-oriented agriculture and natural resource management) considered how local innovation could be enhanced. The PROLINNOVA partners (national NGOs and government institutions of research, extension and education) saw a need for flexible funding mechanisms to support farmer-led participatory research and development (R&D) processes. They developed the concept of locally controlled "Innovation Support Funds" (ISFs) that would allow farmers to invest in their own research, to hire external resource persons to support it, to access external information, and to conduct cross visits. The note explores the ISF concept, and describes how PROLINNOVA partners envisage their operation.