The difficulty is setting the minimum charge at the right level - if things go badly then that's got to be high enough to be acceptable to the musicians, because that's all they're going to get. You also have to be very clear what expenses can be deducted before calculating the final percentage.

In most cases, whether or not the event is successful is largely down to how well the organiser promotes it, rather than anything the musicians can do, so there needs to be some trust involved. However, speaking from both sides of the fence, if it's run properly then it works well. Like Jed says, if its set up right then both the organiser and performer will benefit.

Gargoyle, in the UK most folk music concerts (apart from those in arts centres and larger venues) aren't run by "promoters" or "club owners" in the sense I think you mean, but by enthusiastic amateurs (in the proper meaning of the word). Usually they are not aiming to make a profit, and any surpluses they make will be ploughed back in to cover less successful events, or to subsidise a special performance. They usually have no control of the bar so offering a percentage of bar takings isn't an option.