Businesses run by NGOs are part of the non-conventional funding sources for NGOs themselves. The first and the foremost question about NGOs running businesses is that whether it is ethical to do so since they have been emerged from the spirit of nonprofit-ism. If nonprofits become profit-oriented, then the very basic values are challenged. In this context, one should note that organisations also have their own expenses.
Usually, small and medium-sized organisations are not supported by any internal corpus and in some cases, they begin operating with zero amounts. And when they get funds from donors, they operate until the funding remains and then they again face the same question of un-sustainability. Therefore, one should look upon the profit ventures as the only option for survival. Because, if people start arguing against it, then they may not be in the field for long. NGOs have undertaken businesses and they have found enormous success in many parts of the developing world.
There are also new kinds of services that have been recognised the world over as the new tools for sustainable development and the examples have proved it. Microfinance is just one of them that has not only converted NGOs into profit-making companies, but also reduced the dependence on external donor funding. NGOs can operate businesses initially and some profit is acceptable even legally in most countries.
However, if the NGOs start making excessive profits out of their services, it is only then that other people may start questioning. But at such times, organisations have grown to such an extent that they can form a separate company for covering these activities and this company can fund the NGO’s developmental interventions as a corporate social responsibility.