Hi Ebbie ... You ask some tough questions. As someone who has been on stage longer than I've been alive, and who still (stooopid me) produces and selects performers for local concerts, I've been in your shoes many times. I would offer the following thoughts:

Be honest. If they're not "ready for prime time", tell them so. You don't have to be mean about it, but holding back does no one any favors.

If you've the time and inclinations, make some notes on paper, sit them down, and critique their performance. Suggest improvements. Perhaps recommend a local performance coach.

One of these days (daze?) I'd like to get up your way for a festival gig.

Best wishes ... bob(deckman)nelson