I ran across an interesting quote in Dr. Andrew Davis' seminal work, Baggy Pants Comedy: Burlesque and the Oral Tradition.
"Folk drama exists on a village or small-group level," [folklorist Roger D.] Abrahams wrote in 1972. "The performers are members of the community and therefore known to most of the audience... Popular theater often arises from folk theater but the players are professional and the audience comes from places other than the community in which the players live."
The quote is from an article titled "Folk Drama" in the book Folklore and Folklife.
Sounds like a fair definition of equity waiver theater to me.