Why is background crypto mining not used? If it’s openly communicated and is an opt-in option, people might prefer that over donation or ads.

Honey, no... I appreciate where your head is at with this one, but the goal is to make browsing an instance a good experience, and as computationally simple as possible. Adding mining to the front end of an instance client is very poor for the long term sustainability of the app, because it will incur electricity costs for the end users that will have diminished returns for the instance. So it is a very inefficient way to fund large instances. Users would save money by giving instances money directly rather than letting them mine on their clients.

Ads work because the advertiser believes that their is market value in showing a user an ad, and they can be right or wrong, but financially they are willing to pay more than the electricity cost of showing the ad. I don't even mind the idea of ad supported instances in principle, although I would probably block them to preserve my browsing experience.