I knew of one non-profit that lived off interest, basically. For every million dollars they raise, they can afford to hire one more worker or do X more things, based off the interest that money makes sitting in a bank.

It seems like a good way to go, if you can just raise the millions needed. Maybe some billionaire can set Wikipedia up with a trust fund...

How do they deal with interest rate fluctuations?

You buy long term (5-10 years) CD's.

You know your expenses pretty well, so it's easy to plan it that far ahead.

Or coupon bonds, which pay interest regularly with a fixed amount and on a fixed schedule (set at purchase time for as long as 30 years).

Slightly more risky since they are not FDIC insured, but if you hold to maturity you have zero risk due to market fluctuations, only a risk of the firm going bankrupt totally.

That would be a pretty massive trust fund to pay for all of the server space + bandwidth they need in addition to their staff

Google offered to host them for free, without ads.

They turned them down. I guess that's where the non-compromising comes in - despite google offering to be totally hands off, just free hosting.