For the millionth time: many people make money through free software. Actually, more and more people do: it is the most thriving segment of the IT business. Money raised through donations is nothing. The money almost exclusively comes from "support" (contracts to solve issues within hours, to configure large software, to integrate it in an information system, to develop custom features, etc.). Whole books are written on the topic but here is a 62 pages reference with real-case studies (a panel of 45 companies of various sizes).

Free software means a free market for support (every user having the freedom to modify the source code, she can contract any developer to do so). Proprietary software means a monopoly of support (only the developers of the applications can modify it). In this regard, Free software is "liberal" (which obviously is compatible with capitalism) and proprietary software is an "ancien régime" where every editor of an application is the lord with an absolute control of his land (the freedom to switch from a proprietary application to another is just the freedom to choose which lord subjugates you, in particular with his support monopoly).

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