Forcing a nonprofit to grow beyond its means becomes a problem, particularly when the funding organization ends its support, which in the case of venture philanthropies is usually after three to five years. When the movement began, one of its first intents was to develop exit strategies that would leave nonprofits able to sustain themselves, either through more efficient fund-raising or commercial projects that would generate income. But eight years later, venture philanthropists admit they have not made much progress. “It’s something we’ve all been thinking about, but something that we just aren’t solving,” says Laura Arrillaga, a lecturer at Stanford University who cofounded the Silicon Valley Social Venture Fund. “We need to create a more formalized structure for the social capital market.”

The need for alternative sources of funding has become more acute in the past decade. Americans might be generous donors, giving $241 billion to charity in 2003—20 percent more than five years earlier, reports the American Association of Fundraising Councils. But during that same period, the number of nonprofits—there are now about 1 million registered with the IRS—jumped by about 40 percent, and the number is growing at a pace of 100 per day, according to nonprofit association Independent Sector.

Venture philanthropists have only recently come to grips with the reality that in this environment charities can never truly sustain themselves. Recently, a new generation of philanthropists has started exploring ways to secure long-term funding for successful nonprofits. Like venture philanthropists who sought to inject promising projects with seed capital 10 years ago, these new funders want to support more mature organizations—those with clear operating plans, that know exactly how much money they will need over several years.

The aim is to raise large pools of syndicated grants from multiple donors, much in the same way corporate borrowers raise capital. Instead of making $100,000 donations, these collectives donate $10 million or more at a time. This concept is still early in its development, and it remains to be seen whether disparate grant makers—who tend to follow their own agendas and rarely work together—can come to terms. But venture philanthropists are hopeful. “Part of our role as funders is that once we help organizations get to the next stage, we should help them secure the funding they need,” Arrillaga says.

After nearly a decade in the trenches, venture philanthropists agree that a lack of funds is the biggest obstacle ahead for the nonprofits they support. As they try to find a solution for a problem that has dogged generations of philanthropists before them, they are realizing that they have more in common with the establishment than they thought.

Dalia Fahmy is a Journalist who specializes in business, travel and Middle East affairs.