An acquaintance of mine made over $10K playing small venues last year, including many churches. I don't think he was playing at services, but using the church basically as a house concert venue on off-nights.

As for myself, I've played a lot of small coffeeshops. Many do not pay a guarantee, but some will "seed" the tip jar with up to $20, and I've had some very, very good earnings from coffeeshop gigs.

Heck, last Thursday I played a shopping mall! On the surface it sounds like the lamest gig ever, but I made a killing in CD sales and had a ton of mailing list signups.