A new paradigm for agricultural research based upon the innovation system is emerging. New types of organisation are required to fit the new paradigm. The evolution of PROINPA from NARI programme to foundation is analysed as a case study in organisational innovation in Bolivia, where a comprehensive competitive funding system is being established. The value added and difficulties faced by the PROINPA Foundation are described. The Foundation, as a new type of organisation, widened and deepened linkages with other key actors, added value to the research and development process and appears to fit well with the innovation system approach. The article ends by sharing lessons learned for developing foundations under similar conditions. Copyright © 2007 Inderscience Enterprises Ltd.