By Sarah Adams
Traditional project-based funding—characterized by long approval cycles, fixed scope, inflexible budgets, and transitory teams—often slows innovation and misaligns teams with business strategy. Agile funding creates a more adaptive, outcome-focused way to allocate resources. This goes beyond simply changing budgeting methods. The goal is to enable organizations to make better investment decisions that align with their changing environment.
Organizations shifting to Agile typically adopt one (or a mix) of these three funding models, each supporting agility differently.
Product model
Traditionally, teams organize around one-off projects, frequently assembling and disbanding. Instead, this model organizes teams around long-term products, programs, or services, with persistent funding and flexible scope. Product managers dynamically adjust roadmap priorities based on market feedback and organizational needs.
- Benefits: This approach promotes ownership, accountability, and rapid response to market changes.
Incremental model
Rather than committing funds for an entire project duration—which ties funding to effort rather than value—this model allocates funding in small, time-boxed increments with specific learning objectives or desired outcomes. It enables regular assessment, redefinition, and pivoting based on performance, value delivered, or strategic shifts.
- Benefits: This approach encourages regular review and reallocation while supporting iterative delivery and learning.
Objective model
Traditional departments often become siloed, focusing on their initiatives while losing broader perspective. This model allocates funding to strategic objectives and key results, aligning the whole organization to critical outcomes. This funding approach allows leaders to dynamically shift key talent and resources to maximize value delivery.
- Benefits: This approach maximizes alignment between funding and value while encouraging innovation.
Choosing the right model
There’s no one-size-fits-all solution. Many organizations evolve through these models over time, starting with fixed funding/flexible scope and progressing to outcome-based funding as their Agile practices mature. What matters most is moving away from rigid, project-based mindsets toward a model that supports continuous learning, delivery, and strategic alignment. Agile funding models can be applied in private, public and non-profit organizations.
A final thought
Finance traditionally acts as a control function, focusing on audits and reporting project overruns. With the shift to agility, Finance becomes a strategic business partner, providing timely insights on spending and outcomes to support forward-looking decisions. By adopting the right funding model, organizations can transform Finance from a bottleneck into a catalyst for innovation and growth.