Having helped plan, ridden, or judged in more than I can count, I can give you one guys perspective of what a grassroots event should be.
Taylor hit on it. Its all about atmosphere. IMO the best thing you can do at a grassroots even is to diffuse the "competition" mentality. First thing is to get rid of cash prizes. Cash creates alot of headaches at the grassroots level. It changes things from a riders fun to a riders occupation. Its no fun judging when you are choosing who earns a paycheck. Lately the competitions Ive been to seem to get really segregated. The kids want to be around the better riders and be encouraged by them. However, with upper divisions not starting til later, many better riders dont even come out til later or they just sit in their camper til time to ride. Many times kids have to leave before outlaw even starts! Mixing it up together makes it more fun for all.
The best event Ive ever been to was put on by Todd Weatherill 9 or 10 years ago. The format was simple, any rider could choose any boat available, and had unlimited falls on the course. There were no "divisions". Everyone rode with everyone else. Basically a no pressure opportunity to not only do what you know, but also to push yourself without consequence. At the end, all the riders got to choose who they thought rode the best. After the talley, all the prizes were raffled off to ALL the riders. Everyone who rode got their name in there once. Those voted onto the podium got extra entries based on their placement. Those who podiumed were not all the top outlaw riders, I know one kid got on there because he was just really pushing his limits and it was apparent to all. When the raffle was done, many riders who didnt ride well still made out good, while the top riders draw was modest. Everyone walked away with something. The best part was the entry fee: absolutely FREE.
I would say that single event did more for industry sales, long term, than any other Ive ever seen. More love for the sport was born that day than you would believe. A good percentage of those who rode that day not only accounted for tons of revenue for the sport over the years, but also became employees of the companies at the top of the industry today, haha! I know I won a couple of items, and I still buy those brands to this day because of their support of the event. I still shopped at that shop, even after I moved away, til the owner retired.