While I don't disagree with the transparency Mozilla is advocates, I think it fails to address the underlying problem then tries to compensate by picking and choosing winners (which arguably is the same as the underlying problem). The underlying problem is the ad-incentivized watchtime algorithm, which isn't a technical issue but a financing one.
I've been an advocate of endowments for a long time, but this is just another area where they'd be ideal. They supply a small steady income to support a relatively cheap product. As the website grows you can either do temporary ads to grow the endowment or ask for donations. Either way, it's not that hard to fund operations this small. Add in federated systems like lemmy and each individual operation is even smaller and cheaper.
Heck, universities who are already accustom to dealing with endowments would be ideal places to host lemmy instances. I can definitely imagine offering to donate 10k to an endowment dedicated to hosting a lemmy and mastadon instance with open to registration to students, staff, and alumni. Maybe coordinate with the computer science and IT folks. Allow some percentage of the endowment income to go to "salary overhead" while the rest just funds the server. Point out that the university would essentially be creating the perfect route to solicit donations and they might do it themselves... Honestly, I'm probably gonna flesh this idea out and email the people at my university because it's just too perfect of a solution.
Right! Plus, it'd be an ideal route to solicit donations to the university - people are more attached to their social media than sports ball teams. Not hosting lemmy and mastadon instances is practically throwing away money!