Well I am still not on LOS (I am planning to move in a month, when I have a vacation). But I will share my opinion anyway:
First of all, thank you for your great work, I am not using it now, but I do appreciate it!
The free device is a reward yes. But it is a really shitty pay compared to the hours you guys put in. So it would be totally okay to take donations*.
So if your only doubt with taking donations is the fact that you received a free phone, forget it and take donations.
But if you just have phone developing and don't need to money... well there is a downside to donations. Dona