I organized some grassroots hackathon events 10+ years ago. Turnout was mostly students and die-hard geeks who wanted something to do on the weekend. Even in this small pond we had a local startup sponsor and try to shoe-horn their service into it.

When I attended bigger events with bigger sponsors it felt like 90% marketing to pitch your idea. The actual technical side was never that impressive or interesting.

One community that kicks ass at this are InfoSec people, I've done a lot of terrific volunteer-run CTFs.