If I release an Unreal game for free but receive money via donations will you still expect 5% royalties > $3000 per quater?
It depends ^^
Take a look at this thread: https://answers.unrealengine/questions/117176/do-i-have-to-pay-royalties-on-donations-that-i-rec.html
"Well I think you’re looking at it in the right way, and you’ve correctly identified the right question. It all depends on whether the donations take the form of revenue attributable to the game. So, in a different context, in-game ads are definitively revenue for the game, but ads elsewhere on the website hosting the game definitely aren’t.
The way you’ve described it sounds like the donations would not be actually attributable to the game(s). However, I can see this changing depending on implementation. For example, if you said somewhere on the site “If you enjoyed playing Super Worm Flipping Saturday Picnic Party, please donate here!” that sounds like revenue for the game. If you said “Help me maintain my website!” that doesn’t sound like revenue for the game. If you have a DONATE NOW button right next to the game, that sounds like revenue for the game."
https://answers.unrealengine/questions/166909/royalties-on-donations.html
Quote from EULA