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I would say that you should either ask for donations, or have advertisements, but not both - unless donating means that they don't see the ads anymore.
You might want to take a look at advertising systems where people pay you based on the number of impressions - I've got adsense set up on a couple projects, and because you only get paid when people click the ads, you can have 10,000 pageviews go by without a single cent earned - because no one clicked on the ads.
I've heard that text link ads is pretty good for blogs, but I don't really know enough about it to give an informed opinion(and I'm sure someone who knows a little more will correct me on something I've already written), so my advice would be to check out the alternatives to getting paid for each click on the ad.
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