Gaining donations from your readers can be a great way of bringing in revenue from your blog, especially if you give out a lot of free resources. A good example of this is with Niels Bosma's website (Niels created the SEO Tools plugin for Excel) or on Dinesh Agarwal's site (the generous guy that created an SEO tool for me for free!).

Advantages: If you offer out a lot of free resources or put a lot of your time into giving back to your readers then it's likely that they will be prepared to donate some cash to your cause. Sites like Wikipedia almost solely rely on donation income to operate (as well as voluntary staff).

It's pretty simple to set this up as well - if you have a WordPress site then just install this donation plugin and you can start accepting PayPal donations within minutes.

Disadvantages: If you don't really do much in terms of giving back to your readers outside of writing content then you might find donations aren't the right option.

I've seen 'donate' buttons on standard blogs that don't do anything special for their community and it has actually put me off - I find it quite cheeky and personally, I'd only set up donations if I was offering something above and beyond my usual content that had a lot of costs involved at my end - and even then it would just be to break even.