[EagleNick]

I can't really help with the advertising solution.

However, Donations and Premium Memberships can work if used the right way.
I targeted my users in a unique way.

My donations information thread states that when somebody really wants to donate, they aren't looking for "upgrades", nor am I selling the said upgrades.
Mainly because my users are well off without premium memberships anyways. They have little to no restrictions when it comes to avatars, signature images, PM space, attachments, etc.

And to be quite honest, I really wouldn't want to accept a donation if the only reasoning is to get more features. I would much rather receive donations from members who want to support the site and help offset the costs.

The only features my Donors get:
A special icon in their posbit
Gold Username
E-mail address
Access to private forum
Ads removed (the only ad we currently have is one adsense banner in the footer)
Username on the Forum Leaders page
Ability to change username
-- Notice how they aren't really increased features, but just ways the make them stand out in the community.

I also turn to my Premium Members for their opinions on site decisions, such as new features, design, etc.

I think the reason I have received such a positive response is because members realize I am not imposing restrictions and that I am not hungry for their money. They understand that the site costs money to run, and they are proud of the community.

Ever since the beginning, I have received many donations. Most of them of values at $25USD.

Another fantastic method I've used:
A donation drive. I found a charitable organization/non-profit fund directly related to my topic (parrots/birds).

I announced that for one month, 50% of all donations will be donated to this organization. I also added that of second donations from members who have already donated, 75% will be given to the select organization. (In other words: 50% from first-time donors and 75% from second-time donors is sent to the organization)
Many members actually donated for a second time, so some users ended up having donated more than $50 to my site, minus the amount forwarded to the organization.

At the end of this month, I had raised $96 for this organization... and my donation total was about $65+ dollars.

My site started in mid-February (of this year), and to-date I have raised over $200 in donations.

We currently have 113 active users.