It is recognized that international water sector development work has issues with a lack of sustained positive outcomes. A large driver of this outcome is how NGOs work with communities to implement and then manage water services. Many NGOs tend to focus their efforts on improving their reach and organisational growth by continually engaging in new projects. This behaviour is largely driven by short-term donor funding models that reward extended coverage, leaving little focus on sustained outcomes. Similarly, community-based management (CBM) schemes often impede sustained services as a result of the community’s limited capacity to operate and maintain the technology. To explore these complicated drivers on water service sustainability, we used causal loop diagramming to analyse the key aspect influencing the combined dynamics between NGOs, donors and CBM. We demonstrate this methodology through a study in Timor-Leste, where we gathered data necessary to develop and apply causal loop diagrams to analyse rural water supply program outcomes. The analysis of these diagrams allowed identification of leverage points used to suggest structural changes for sustained benefits of water services. These structural changes emphasize the importance of increased robustness and reliability of water technology and the associated impact this has on community satisfaction and, conjointly, on water service sustainability.