Rick has pointed out (perhaps in a blog post, perhaps in one or more of his books--I don't remember) that the guides working for "free"-tour companies actually have to pay the company for each person who shows up, irrespective of the tips they receive. I think the amount mentioned (for a euro country) was either 3 or 3.50 euros. So if you have an idea of handing a guide something like 15 pounds for your family, you should understand that you are expecting that guide to work practically for free.
I prefer regular paid walking tours; if I take a "free" tour, I tip the guide an equivalent amount, no less than 10 euros or 10 pounds. I wouldn't have a problem tipping less if I had an incompetent guide, but I have not run into one of those.
I appreciate a tour that focuses on what I am seeing for the full time, rather than devoting (often) quite a few minutes to explaining the concept of a "free" tour at both the beginning and end of the tour.