Misskey, which is Japanese-made ActivityPub-enabled social media software, has option to enable ads natively for instance admin.

In most cases, the ads are just non-tracking community ads, like promoting YouTube channel, indie animation, pop-up cafe event, or server hosting service. Usually the ads are matched to instance theme.

People realize that running instances needs money and letting the instance admin to make living from it is acceptable. Having monthly patron oftentimes not enough.

This is different case and country. There are plenty of dead fedi instance from Southeast Asia because the donation itself is not enough as the culture of donation is not the same as Western countries. Most people will just simply use free social media and thinking ads are good tradeoff.