I think that I should explain something about myself; I am a big fan of the Vajrayana traditions that come out of Tibet, but in general I am not a fan of the institutions serving the Vajrayana. In my experience the only ones that seem to work are the ones where there is a good lama in close enough proximity for the students to have a reasonable amount of contact. The lama can give guidance, inspiration, and can keep the b.s. level down to a roar.
His Holines the Dalai Lama mentioned in a teaching in Switzerland last year to "consider the problems in religion carefully. It is not the religion itself- it is the institutions. This is the case with Buddhadharma."
Tibet was a completely Buddhist country and could support large scale institutions. It will never be a majority religion in the West, so the manifestation must change on a fundamental level to be practical. Smaller groups led by qualified teachers would seem to be ideal- the proximity is a key element of what makes something special. When I came to this centre in Holland with Geshe la for the first time last year, I saw directly the benefits of having a qualified resident guide over a long term period. GSG had been here for 15 years, giving weekend courses on essential philosophical treatises but also teaching and attending, for example, the monthly Yamantaka self-initiation, guiding pujas and leading retreats. This has led to a core group of well-educated and committed practitioners, the question now becomes how to bring in the younger crowd, but that is a topic for another thread
The idea SMJC mentioned is something like an "apprenticeship" with a qualified teacher leading a small group of students towards realization. This is how it was in many of the spiritual communities in Tibet. Even within the large Gelug monasteries, which on the surface seem monolithic, this is still the case. There are the small house groups with resident, qualified teachers who fill in the "experiential" part of the philosophical framework that is covered on the debating ground. There is a bond between teacher and student beyond the level of the institution, and it is these masters who give initiations, oral instructions and correct mistakes. We need this sort of system if we are going to make Buddhism work in the West. And it needs to be on a scale which is sustainable in Western culture.
Unfortunately what I have seen happen in many other situations in the West is that the institution gets established but without the regular presence of a qualified teacher to breathe life into it. There is a centre in Europe being established for a lama who is already elderly with no resident teacher- however a building is being purchased to hold a maybe two 3-4 day events a year. Why not invest that sort of capital in education, training people to be able to pass on something of the teachings, or supporting people to be able to take time off work and engage in meaningful retreat?
What is beginning to happen, and we can see this very clearly, is that organizations that are spread too thin often establish many large centres (with large buildings) while the teacher is young and healthy. Then when the teacher ages and passes away the organization falls into decline and often the buildings fall into disrepair or become unsustainable and are sold off. This is a real shame, and as was mentioned above, not a good use of resources. There is nothing wrong with renting a hall for a teacher who comes a couple of times a year. It doesn't require a permanent building. That is required only if there is a teacher in residence for more than a couple of months a year.
It's just practical.