Thank you. Not free.
Donations are nice. My organization lives on them.
Lately, not well. Donations fall off during bad economic times. They'll pick up again later, but it will lag considerably behind any recovery.
Unless a blogger has a sugar daddy, I would expect that the donations to him will drop as well.
Just wait. People who want a steady income will eventually need to be paid on a less arbitrary basis. It's not free now: some people are paying for everyone else.