Maybe it's the confusion between "fan film" and "no budget film". Phase II and other fan films is certainly not "no-budget".
There are several tiers in fan film production. The top tier has quite a bit of a budget. The middle tier has a modest or even minimal budget. The lowest tier is literally being made on a shoestring, and might even be doing the editing in the camera.
Potemkin is fortunate enough to be a middle tier production. We have a modest budget (which comes out of my pocket usually) that goes to the set construction material, purchase of mini-DV tapes, costumes, makeup, lighting. None of it goes to the producers, cast members, VFX guys, directors, etc. Construction is done by volunteers, e.g. my son and I relocated and rebuilt/built the sets for Potemkin this summer.