Summary This article will describe the activities of the Baudha Bahunipati Family Welfare Project (BBP), which was set up by the national level NGO Family Planning Association of Nepal (FPAN) in 1973, initially to distribute contraceptives and provide a basic medical service. In the districts in which it operates, the BBP set in motion a process of initiating bottom‐up planning, handing over responsibility to locally formed NGOs, and creating a sustainable programmes of local activities. Several NGOs have resulted from this process; however this article describes in more detail the experiences of one of them: the Mahankal Health Service Management Committee (MHSMC), and how it became financially self‐supporting through charging for medicines and services.