People will eventually pay for content, one way or another. They already do, in some places (WSJ, Cooks Illustrated, etc.)
Many people say that whatever is coming next isn’t here yet – I disagree. I know individuals who are building entire (nascent) media brands on little more than sweat equity – without anyone noticing, some bloggers have begun, as their revenue streams have expanded, to turn into actual reporters – ecogeek.org is a good example.
Charity is probably not the answer, but that doesn’t mean it doesn’t have its place. (e.g. Spot.us) For-profit businesses, by definition, are capable of expanding, even thriving; charities are inherently self-limiting (or limited by the availability of those kinds of funds).
Things seem bad now, but remember, advertisers still want to reach audiences, and they’ll do it one way or another. This terrible advertising market will bottom out — and whoever is left standing will reap the benefits when it finally recovers.