This mailing list has some interesting discussions on the topic of free software business.
Some general advice is available on this web page (google cache). Skimming this page might offer some inspiration for people thinking grants in addition to FSB. (Indeed, we might think about grantors as if they were clients, and see if any further inspiration comes from that.)
For example, on this page it is suggested that customers are unlikely to pay for internal code cleanups. I would imagine this is true of granting agencies just as much as it is true of potential clients. So perhaps volunteer support for the Noosphere rewrite is really the only way to go!
Surely there are other references about FSB? - more info should be added here.
First, here is a note with some (preliminary) discussion of how we might make AM projects financially independent. And see also this essay: Who should fundraising target.
Grants could definitely be a part of the picture, but they are already being discussed elsewhere on the wiki.
So this section is about other things: membership, for example, but here we give special consideration to useful for-pay goods and services that PM and friends can, or could potentially, provide.
Paying relationships with other organizations would similar to grants but also similar to membership. Perhaps there are some organizations (professional or industry) would be willing to support PM financially with a no-strings-attached monthly check - and perhaps the minimal requirement that their organization gets listed on a Sponsors page. Finding sponsors like this should be part of our Letter writing campaign.
One possibility that I've long considered for HDM is the sale of printed books and manuals. PM could consider the same thing, once it establishes a large enough library of free books to sell (one reason to enhance the support for creating new free books. Of course, we are already preparing to sell copies of the FEM (though this is not quite ready yet).
For any business model (or combined model) to work well, we will need to have a clear budget. So see the Budget page for more discussion.