Wikipedia does frequent fundraising. Linux is all about the money—there are amateur linux hackers, but more professionals. Firefox makes money. Of course they aren't all about the money, but money is important. A geek's got to eat. So if you don't think about the economics of the development cycle, you are being unrealistic. It may well be that the economics of a good distributed social network do require that the hacking be done by amateurs; it may be that there's a way to make a business of it.
I don't know why a non-profit social network would be better. Have you looked in your email inbox recently? I get constant spam from the nonprofits I've made the mistake of supporting, even the ones I think are really important. And nonprofits can get harvested—IIRC some big church I won't name sued a nonprofit that had targeted it into oblivion, and then purchased the assets.
Personally I think the right distribution model is lots of smart CPE routers, with no paid hosting at all except maybe for some kind of DNS rendezvous system. The Diaspora model seems too centralized, despite the fact that it's technicall a distributed architecture. But I have no idea how it gets paid for, and apparently the Diaspora folks don't either, now that the initial funding is finished. Crowdfunding features and maintenance might be the best model.
That said, there has to be a model. It's not going to Just Happen.