We have been asked a number of times recently for our ceilidh band to play for nothing for charity events. (and agreed sometimes!) Before saying 'Yes' or 'No' there are some financial considerations that ought to be born in mind.
Our annual Public Liability Insurance premium, web site domain rental, and PAT Testing fee comes to about £100. The depreciation on £2K worth of PA equipment over 5 years is £400. Doing an average of 15 gigs a year this is £30 per gig in fixed costs. If you add to that travelling costs for six people at a minimum level, if you play a gig for nothing, the band is probably subsidising the event to the tune (sorry!) of £100!
The maths works out differently for a soloist or a duo. If Astrid & I go and play somewhere for free (which we do occasionally) then we are covered for Public Liability by our EFDSS membership. Now as we would probably be EFDSS members anyway, the cost of this is not a 'relevant cost' (in the jargon) If this was not the case, then the £30 or so annual fee would need to be taken into consideration. We do not normally use PA (I used to use my old Peavey Solo mains/battery amp which was about 15 years old, so 'written off' , but have now invested in a 50watt battery/mains amp which cost £99 from Maplins, so would need to add something for this) so our 'relevant' costs are travelling, parking, refreshments, and wear and tear, accident/theft insurance on instruments, strings etc. As retired persons our time is 'free'. (If we were not retired, we might need to add £6 or £7 per hour for 'wages') So I reckon if we play for free it costs us about £20- £25 or so depending on distance, and if they give us £30 we are in pocket! There is a potential 'opportunity cost' in that if we were playing for free and turning down a paid gig, (or if one comes in the meantime) then we are losing that money.
I know that most of us play for the love of it, but there is a limit to generosity! In my humble opinion some of what you need to consider might include (a) Is it a good cause (b) Will it be a good opportunity for the right kind of publicity - will the paper/radio be there (c) Can you sell CDs/give out leaflets (d) Do you need the practice!
Something else to think about - is it a good idea for people to expect to hear great music for nothing? Should people not get in the habit of putting their hands in their pockets? And if you play for free, are you not depriving someone else who needs the money?