As I've pointed in other comments threads, I run lemmy.pt on a $5/month Vultr VPS (along with some other small stuff). The instance is pretty small still, and as such resource usage is tiny, however, from what I've gathered before, such a VPS will do for quite a while!
Regarding funding, I just pay for the server myself. I created a liberapay group/team/org because some people suggested it in our Matrix channel, but it is clearly labelled as something for people that reeeally want to help out, since I can cover the current costs with no issues.