On the Fireside Fedi interview with Jerry ( the admin of Infosec.Exchange Mastodon instance ) a scary truth was suddenly revealed ( on 34:11 ): Just to keep the instance up and running he needs to spend up to $5000 a month, pretty much out of his pocket. Donations to the instance barely cover any of that. And if he will ask people to pay to use it, they will, rightfully so, switch to a different instance.
We need to make it easy to check the financial health of an instance. And things like costs and money made from donations should be visible, and rendered as progress bars or charts. So people would know when and to whom to donate.
These things would be good but they wouldn’t change the general incentive. There are still plenty of instances that are properly “funded” but still go under, lemm.ee being the most recent example. The problem is that these donation-funded instances are bound to hit a ceiling even when they hit their raising targets.
Mastodon instances that have good transparent reporting of their status (hachyderm, fosstodon, mastodon.social) are all receiving enough donations to support the hardware, but no one accounts for the labor of the admins and moderators and these are the real operational costs for the instances - and no one wants to pay for those.