Not necessarily, Beznerds. There was the Steam/Skyrim situation a few months back for example. More commonly though, a pretty considerable portion of mods do accept donations and it's generally seen as perfectly acceptable.
We however get into different territory though since we're a Star Wars mod. I'm also not terribly sure on the utility of accepting them. I'd certainly think I would feel a little uncomfortable with it as well. The mod technically doesn't cost anything to make or distribute save for the $15 I pay per year to keep the domain name of the website. On the other hand as you say, because it doesn't bring in any money and it's an huge time sink it has to take a backseat to real jobs which are necessary to support ourselves and develop the mod through that. I'd certainly love it if I could support myself via the mod since I find the work more engaging and rewarding than my actual job but I'm not sure if even replacing one of our workdays with donations-funded mod workdays would be reasonable, and that's honestly the bare minimum for me to even consider asking for financial support for any of us from the community directly since that's the only way there'd be any visible impact for you guys. I've also thought about doing 3D Art and whatnot on commission for money as a way to improve, but not sure about the market for that
As far as incentives for us go, my week goes pretty much like this: for the work week I go to work, get home, work on the mod while watching stuff, going to sleep, repeating until my weekend when I do whatever I have planned with friends and work on the mod between that so there's not much I could be incentivized to replace with modding. Honestly, it sounds cliche the best way to support us is to show interest, share opinions (yes, even critical ones) and spread the word (ie posting on reddit or other message boards, sending it in to websites, sharing links with friends who might be interested, making or watching videos). Knowing other people care helps us care, and discussing the mod with you guys helps us build ideas, know what you wanna see, etc. The second anything is done the first thing I want to do is run to the forums or ModDB to share it (which, incidentally, is what prevents us from having good actual news posts. My bad). That' exposure and sharing is also what helps us find other people who can and want to help develop the mod.
In the future if we ever did an indie game or something we'd probably consider something like Patreon, kickstarter or gofundme more seriously but for now the loving adoration of our fans is more than enough. That being said, I do have ad revenue enabled on youtube for my LPs since it's not actually costing anyone (very small amounts of) money but the advertisers so if you wanna watch that stuff, that's cool too.