Many small server instances are paid for out of pocket (you can make your own too, about $60/year renting a cloud server and $10/year for a domain name). Bigger servers rely on user donations.
The Lemmy software development relies on donations as well, but they also receive grants from NLNet. Some of the grants are tied to accomplishing specific features. Third party app developers generally rely on donation support as well, if they’re not doing it just for the fun of it. Unsupported projects tend to get dropped after a while, though, so money does help keep up motivation.
Many small server instances are paid for out of pocket (you can make your own too, about $60/year renting a cloud server and $10/year for a domain name). Bigger servers rely on user donations.
The Lemmy software development relies on donations as well, but they also receive grants from NLNet. Some of the grants are tied to accomplishing specific features. Third party app developers generally rely on donation support as well, if they’re not doing it just for the fun of it. Unsupported projects tend to get dropped after a while, though, so money does help keep up motivation.