There are a few different takes on how to use bounties to encourage work on specific projects, or to share support from specific organizations.
- Bounties for awesome (highlighting specific projects/problems)
- Summer of Content (projects and mentors)
- Bounties for coding projects needed
 Past project experiences
Sources for bounty info: Google for trac bounties
- libsecondlife Bounties - offers USD and Linden-dollars
- Tinymail Bounties (none currently)
- Dr Queue Bounties (Wiki-based none currently)
- Gnome bounties (archive, no longer done)
What to consider: rules, eligibility, project length, bounty size, incremental updates
This is something that's been done by CodeWeavers for the wine project, mostly by corporations who wanted certain features. Legal Aid Manitoba had CodeWeavers make their application Childview work on wine for $2,000. Walt Disney paid them for work as well.
Mako has written a paper on the funding of volunteerism.
It is hard to gauge the effect offering bounties will have on a development community, especially one such as OLPC that relies on some sort of intrinsic motivation for development. Louis Villa wrote crowding out of intrinsic motivations, a review of literature related to the effects of offering/charging money in certain situations, specifically in relation and response to GNOME's bounty program (Archive.org link, program is no longer active).
Maemo developers discussed bounties (referencing Villa's blog entry).
- Pidgin: (from #pidgin on freenode):
14:53 < erikg> is there a bounty program in effect for pidgin development? 14:54 < ``Cube> erikg: I wouldn't go for that. A friend of mine once took one for 1,500$ only not to receive the bounty after finishing the plugin 14:58 < erikg> ``Cube: wow. 14:58 < erikg> ``Cube: do you know anyone who's gotten one? or is it just vapor. 14:58 < ``Cube> erikg: vapor? 14:59 < ``Cube> oh well no, I'm sorry, but I know there definitely are some bounties for adium (I know that wasn't your question, but might help you out) 14:59 < Err> I don't know what ``Cube is talking about (and have doubts that he does, either), but pidgin does not have an official bounty program 14:59 < ``Cube> Err: yea, that's the problem: not official 15:00 < erikg> adium. yes 15:00 < Err> that's not the problem - the problem is that nobody ever draws up contracts for these things, which is the only way you can realistically expect not to get robbed