Our Group was originally formed by an Ops Manager at Heathrow to provide an environment in which airport staff could learn to fly who otherwise wouldn't be able to afford it. This was in 1964 and we're still going over 40 years later. We all give our services for free to minimise the cost-base and encourage a club atmosphere in which we all fly as friends. We are strictly restricted by the owner of the aerodrome from which we operate in who we can accept in our Group, quite rightly, so that we don't 'undercut' the commercial schools. In any case, we offer a quite different product. Interestingly, our membership numbers and hours flown have both fallen away in line with reports from many other organisations. We just don't seem to be able to attract enough people who fit our membership profile; there does seem a general waning in interest in learning to fly, even within the aviation industry.
In this context, I can't see anything wrong in instructors working for free for a self-help non-profit-making Group. In fact, I've just acquired the Class Rating Instructor ticket so that I can check-out PPLs properly. I won't be charging for this.
This is quite a different matter from organisations who are required to make a profit taking advantage of those who don't feel able to charge the going rate for their services.
TheOddOne