Paid CFIGs/Tow Pilots in Club Setting

A debate has arisen in our small club regarding CFIG and tow pilots
getting paid under certain circumstances. First, a little background.
We have less than ten active members, three CFIGs (two who are
available only part time and a third who just got his ticket). Our
membership has been stagnant for several years. Different reasons have
been cited including ugly trainers (2-33 with a nice L13 added a few
years ago), lack of promotion and lack of CFIGs.

Two instructors have proposed charging for instruction and a tow
pilot, not wanting to be left out, would like to be paid if the
instructor is getting paid. ("If they're getting paid, so should I")
The CFIGs and tow pilot would be paid directly by the student. The
tow pilot would also like to be paid for towing or acting as glider
PIC for the occasional commercial rides we do.

Do any clubs out there charge for instruction? Any tow or commercial
pilots getting paid for rides?

It seems to me that these ideas are frought with CFR, legal and
insurance issues and the line between a club a commercial operation
would be crossed.

The CFIG issue is, "I won't do it for free - too much liabilty and
cost incurred getting my instructor rating. If you don't want to pay,
find another CFIG". That's putting it coldly but accurately. The new
CFIG hasn't decided what he is going to do but may teach for free if
the club picks up the cost of liability insurance. (BTW: What does
that cost and who offers it?)

Don't just tell me its a bad idea, if that's what you think. Cite
specific regulations or CFRs, if any, that would prohibit it.

Thanks,
Mike