Imo I think the expectations around donations are just way, way too high as well. Look at something like Eff95, they have the donations page public, and they are very upfront that their ad agreement covers server costs and donations are used for extra stuff like upgrades to the site and whatnot.
They have over 28,000 people currently on the site, with over 8 million users and had less than $500 in donations last month, $90 so far this month.
LC has 234 people on right now, 100x less traffic and is trying to live off of donations, it just isnt viable. There HAS to be a long term plan in place that doesnt lock content away from the users, or they are never going to grow to a size that is sustainable.
There still isn't anything besides the very few loli games / AI stuff that separate this site from others and right now people cant even see that shit to know if they want to become a part of the community. There is no reason for someone to join here over eff95 because they cant even see the stuff that actually makes it stand out. All people can see is a significantly smaller community, and banner after banner begging for money.