Some thoughts Lizzie. The first one is possibly a bit on the negative side but it is important otherwise you might find yourself out of pocket.

Try and identify the likely size of the market for the CD. The folk market does not have the huge sales potential of the popular music industry and you need to know if the costs involved will make the venture worthwhile.

People might be more inclined to buy the CD if the material is not available elsewhere. Some of the artists in mind might have some out-takes or tracks which didn't find their way on to an album; the quality of these tracks need not be sub-satandard and might still be worth a listen (like Poor Will and the Hangman which did not find its way onto Fairports Full House but has since been put on various compilations).

Another idea is to get some sponsors who will pay for the artists and studio time to record some new material - this would have the added value of top class recordings and material that would be sought after because it is not available elsewhere. This sort of thing worked very well for the Song Links albums produced by Martyn Wyndham-Read, but for the sort of money you might be looking for, some corporate sponsors would be worth pursuing.

If the costs involved relative to the profits make the project uncertain, there is nothing wrong with abandoning the idea and put on some benefit concerts instead. Indeed, with an offcial presence by the supported charities, the concerts could be well supported. There are some mini-festivals which have become well established from the original idea (ie Folk for MS). With the artists consent, it might even be possible to produce a live CD.

Whatever you decide to do, good luck with the venture.