the incentive would be because either the sponsor thinks they can sell the work for profit (commercial motivation), or fan based motivation (they really like the artist's work, and would pay to see it).

The work isn't _given_ away after its done - the sponsors gets to choose what they want to do. If none of the sponsors give away the work, then it could become quite an exclusive/unique piece of work! Or, if one sponsor decides they'd like to share it for free on torrent, it would indeed destroy the business model of the sponsors who might be interested in selling the work commercially. But that's the risk they have to take.