It seems like it would be better if crowdfunding sites didn't give you the entire lump-sum up front but instead gave it to you incrementally as you completed pre-defined milestones.

So if you have 8 milestones you get 1/8 of the money up-front and then each time you achieve a milestone. If you take twice as long to achieve that first milestone and run out of your initial payment.... welp then you have to go back to the community and ask to renegotiate the arrangement.

Nothing, but that's the risk of crowdfunding. At least in this case it was someone quite well known in the community with some sort of track record (flattr). Projects fail, and to be honest, it was always a possibility here with his legal problems.