The non governmental organisation (NGO) sector has a lengthy legacy in Malawi going back all the way to the period of colonialism. However, the growth of the sector was restricted in the two key political eras of colonial rule and post independence under the first republic which ended in 1994. The new dispensation of multiparty politics has facilitated the growth of the sector in terms of numbers. However, the local NGO (LNGO) sector has largely remained underdeveloped due to a poor skills base and low funding among others. While the International NGOs (INGOs) have enjoyed better funding with the leverage of foreign social capital, the LNGO sector remains underfunded and vulnerable to manipulation by donors because they have not managed to attain considerable financial autonomy to leverage on. This study has confirmed that although most LNGOs consider sourcing funds from a narrow base, mostly donors, they can tap into various opportunities for revenue generation with creativity and strategic thinking. Malawi has a very enabling legislative framework for NGO funding and this provides room for growth of NGOs in the area of fundraising. However, there is very limited knowledge and capacity among LNGOs in terms of being able to explore alternative sources of funding that are less restrictive in nature. Most NGOs already apply single-loop learning which allows them to monitor pre-set indicators within a certain operational framework. However this type of learning does not allow them to actually ask fundamental questions about the appropriateness of the very operational framework they are using. Additionally, by bringing on board double-loop alongside single-loop learning, the NGOs have an opportunity to develop and apply their operational frameworks while being able to throw them out when necessary. In other words double-loop learning helps them to think outside the box. The dominant existence of single-loop learning in most NGOs has also contributed to inadequacies or absence of strategies to deal effectively with the question of autonomy. Some of the NGOs have potential to generate considerable levels of income from unrestricted sources but have not managed to do so because the prevailing mental models overshadow their ability to think out of the box. The Active Youth Initiative for Social Enhancement (AYISE) as a case study has showcased the potential for innovation in NGO enterprise development. In some instances, the sector line in which an NGO is operating can be a factor in the choice of business enterprises to embark on. In other instances, this may not be the case. For example, AYISE is a youth focused organisation and this means that as it pursues its business objectives, it should not engage in activities that may antagonise what it represents. Business activities such as selling of alcohol or cigarettes are inappropriate for an NGO like AYISE. Furthermore, NGOs such as the Ekocenter of Yugoslavia embarked on organic wine production, as a way of promoting their sector line authority (environment) through showcasing of environmentally friendly crop production processes. This implies that there is also an ethical or moral dimension to fundraising which NGOs must consider. However, other alternatives to fundraising can go across the board, for instance desktop publishing. It is a business activity that can be done across the board although limitations are also possible in terms of content to be published. To reinforce this point, a youth NGO such as AYISE, may not publish posters advertising alcohol while an environmental NGO may not put an embargo on such content. It is therefore fundamental that an NGO should be careful and conscious of what it is planning to do and how its actions would affect its image and values. The corporate world remains largely untapped as a source of funding for LNGOs and yet it has potential to offer funding with fewer strings attached. / Thesis (M.Com.)-University of KwaZulu-Natal, 2009.