Donations - Relying on faithful members that believe you are pouring your; time, heart and soul into your forum to provide you to use their hard earned money for forum services, hosting payments and competitions etc. (or so they hope).
Subscriptions - Having members put on a plan that is optional for more features or limits lifted, this can be anything from their PM limits from 75 raised up to 300 or allowed their own custom title, larger photos/images posted, placed in new group etc. which can make them feel slightly more attached to the forum due to them making a difference and earning the right to be respected.
We have a donations scheme. I admit that i need to redo mine but the way our system works is any user who donates is then given "VIP" status. This allows them extra features then other users such as more inbox space, a whole set of forums for them and sticky access.
Subscription i think is good but in my opinion it would be hard to keep users wanting to subscribe and you would have to keep finding ways to keep people subscribing.
I find that if you have someone that has donated then they can always be VIP or such because they have been a contributer even if it was only $5.
I feel that offering forum stuff through subscriptions is always a bad thing. If your forum makes a person pay, say $5 a year for enhanced inbox and other goodies, what's to stop them from joining the next one that offers this stuff all for free?
I'd personally go with a Donation system, where anyone that donates gets a nice "Supporter" icon on their postbit. Nothing else is given but this.
This way, any member that cannot donate won't feel left out because of being unable to do so, yet members that can donate have something special -- and can feel like they're really making a difference, since they get no reward for donating.
The only way I would go with Subscriptions is if the service offered is actually worth purchasing. Like maybe a downloads area for content that you may not be able to find legally anywhere else, or a one-time payment option for an item that is directly sent via Mail to the users home. (Selling products, in other words).
