Abstract Background Essentially all heterogeneous materials are dielectric, i.e., they are imperfect conductors that generally display internal charge displacements that create dissipation and local charge accumulation at interfaces. Over the last few years, the authors have focused on the development of an understanding of such behaviour in heterogeneous functional materials for energy conversion and storage, called HeteroFoaM (www.HeteroFoaM.com). Using paradigm problems, this work will indicate major directions for developing generally applicable methods for the multiphysics, multi-scale design of heterogeneous functional materials. Methods The present paper outlines the foundation for developing validated predictive computational methods that can be used in the design of multi-phase heterogeneous functional materials, or HeteroFoaM, as a genre of materials. Such methods will be capable of designing not only the constituent materials and their interactions, but also the morphology of the shape, size, surfaces and interfaces that define the heterogeneity and the resulting functional response of the material system. Results Relationships to applications which drive this development are identified. A paradigm problem based on dielectric response is formulated and discussed in context. Conclusions We report an approach that defines a methodology for designing not only the constituent material properties and their interactions in a heterogeneous dielectric material system, but also the morphology of the shape, size, surface, and interfaces that defines the heterogeneity and the resulting functional response of that system.