Pushing site profits back into the site
Profits
I'm counting profits as income generated by the site after expenses (like hosting or paying guest writers). Something as simple as being paid for an article can create a couple of hundred dollars that you then need to decide what to do with them. So I'm looking at the options.
Back into the site
Using profits to help push the site forward is a nice idea. Say you've been given $200 for something you wrote - imagine what could be done with that? $250 will bag you a ReviewMe review with JohnChow.com and that's a reasonable use of money - 10,000 unique readers a day and a PageRank that's surely going to spiral above PR4 at the next update.
If you're selling something then $200 on Google Adwords would go a long way too and help move things forwards. If you're wanting more content on the site then that $200 would really pay for a lot of guest articles for you to keep for a rainy day. $200 would make a handsome competition too (although my current $150 competition isn't going quite to plan). There are many ways to use profit to help move the site forwards if that's the angle you're interested in.
Back into your pocket
No one will think less of you for putting the money in your pocket. It's your site, your effort and you can enjoy the rewards in the way you want. I do this (with about half the money it seems) and it's a perfectly good way to enjoy the spoils of running a website.
Charity
There's always a warm sense of satisfaction in helping your fellow man out, so donating your profits to charity will give your blog a selfless feel about it - you're doing it for joy of it rather than the money and I'm sure people would respect that. Of course I have bills that need paying so this isn't an option at the moment - but if the site earned more than I'm sure things would change slightly.
Conclusions
So you really can do anything with the profits from your site and depending on your aspirations, putting the money back into the growth of the site could really pay dividends later on. Although I may have to restructure my current competition slightly because it's not worth my while at this moment in time. Good luck bloggers, please let me know if you've done something amazing with your profits and it worked out well.
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