Well not all folk clubs do charge entrance fees...

They need to pay for guests (a club say running a 1 in 4 for example may need income from all 4 nights to pay for the guest night).

They perhaps have other costs, eg. equipment, a charge for the room, etc.

I've known clubs build up a reasonable reserve (which I've known be partly spent on bigger name or extra guests, kit, etc.) but never one making profits.