How do you manage without any money?
I think the better way to think about this is to ask what you need money for? Space can be found for free at libraries, local community centers, other nonprofits, etc. It takes work to find these places but many of them know that in this economy having people come and learn about them while they're learning about other things is very beneficial. Start small on this. I spent way too much time trying to find space that so far we haven't really needed. The library and one other location actually serve our needs well. The occasional coffee shop rounds out our space requirements for now. We'll have more need in the future (I'd hope!) but that can happen when it's necessary rather then in advance.
You can print out a few on your printer. You can bug your friends and family and others to print out a few of these. Printing out 5 flyers in black and white costs virtually nothing for anyone so why raise a bunch of money for this when you can do relatively well for a few pennies from various people in your network? Plus since these people are probably distributed around town you solve the problem of having to get flyers to people to hang.
Haven't needed it despite being told that we would. The more you spend on marketing the more people will know about you quickly and the more you'll struggle to keep up with the growth. Growing slow has huge benefits if you don't have deep pockets to hire developers and others to help you.
My friend in Paris is hosting the site for free. That being said there were plenty of people that were willing to host a website. While you're still running a free site (from googlepages or one of the other free website places) this is irrelevant but eventually you may want another better site. This only became important as we got bigger. All this being said there have been several community members who have offered hosting space. We've also received lots of free tech help from folks in the community. There's a ton of open source people here (and everywhere) and most of them love the idea of a free school. Finding help is easier then you might think.
As for the website design our local community college came to us and asked to do the new website design. Amazing really. There are other resources but most likely you have someone that could design a site for you for free. Don't do this right away... struggle with a free ugly product for a while. You'll learn more about what you want and don't want and be able to request what you need when the time comes for something better.
I'm not sure what else you'd need money for.... people can bring their own supplies to classes and sometimes instructors will bring their extras (what knitter doesn't have a bunch of yarn they aren't really going to use?)
Some of these things cost a bit of money from me but its way easier to spend $100 a year or so then raise money so I don't have to spend this personal cash. The only real cost that I can think of that is directly Seattle Free School is the $10 domain registration fee. Really that's about it as for legit costs.