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this post was submitted on 18 Jun 2023
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I think people really overestimate how much stuff like this costs relative to how much users are willing to spend. My 1.5k user Mastodon instance costs roughly $100/mo for managed hosting. I set up a donation portal on OpenCollective and got fiscally hosted by the Open Collective Foundation (giving us 501(c)(3) status).
Overnight we got one-time donations covering more than six to eight months of our hosting costs. Our monthly donations are double our hosting costs. And we've gotten donations from private charity funds and are eligible for grants. This is all from less than 1% of our user base paying us just a little bit, usually <$10.
Lemmy is infinitely more efficient to host than Mastodon, and I'm sure some Elixir-based alternative will come along and make it cheaper to host too. The fact that Patreon is as successful as it is right now and that creators can make a living off of it shows that this model is self-sustaining and that you don't need advertisements or to profit.