Most of the clubs I have had involvement with have had audiences with a very liberal attitude as to what they will tolerate. Although, I have been to a couple of "Traditional" Music Clubs where the organiser would request details of a strangers songs before offering a floor spot. One organiser used to audition floor singers on the stairs leading to the clubroom.
For me, personally, it's about whether a song "Tells a story" or "Paints a picture" and withstands the test of time, that makes it a folk song. So, with the Beatles in mind, Eleanor Rigby - Yes, She Loves You - No.