It seems like a lot of people are interested in the challenges early on, but towards the end of each month there are very few entries.  Even last month, I had every intention of putting together a film, but I mismanaged my time.  I ended up scrambling to put something together within the last few hours of the night.  Three months would provide a nice cushion for those of us who get distracted by "life."

I also think the challenge themes need to be broad.  For this month, I thought I came up with a broad theme ("a strange macabre terror"), but there was an aura of confusion surrounding the topic.  Maybe in place of choosing a theme, animateclay could bring back the haiku system of SMS.

MattChappell,
I thought your theme was a good one, and it definitely gave me some ideas.  But so far I've half-finished the set, made the main character's head and hands, and still have to make the body.  There's a second small puppet required, and  half a set and several props still to make.  It wont happen this month, and possibly not before the end of August either.  So, given a longer time, I would be very likely to do an entry.  But in a month, I can't do anything that feels worth doing to me.    This would vary with different animators' experience - if you're starting out, doing short pieces in a limited time is certainly worthwhile.  If you've made a number of finished films like me, you are probably wanting to go a bit further.  The other problem for me is that I keep coming up with an idea that needs new characters, and usually a new set - and once that idea takes hold it blocks me from thinking up simpler things.   Even when I have an idea for an existing puppet, like the skeleton for the drinking challenge, my idea required a second character that I had to make from scratch, and a simple set and props.
So I think there is a place for a monthly challenge that really sticks to the KISS principle, but once you start thinking in terms of telling a bit of a story it starts to get more involved.  It could be a challenge every 3 months, it could be one each month but with 3 months to the due date so there are always overlapping challenges.
Of course, even 3 months won't always be long enough - I finished one Stopmoshorts entry (L'Animateur) about a year later, and Dave Hettmer is doing one from 2005 right now!  But that's ok, that means it served the purpose of stimulating an idea, and if it leads to a film rather than a quick entry that's good too.
I did like the old keywords we had at stopmoshorts though - 2 or 3 words so if one didn't spark off an idea, another might.  And sometimes combining 2 or more was a good challenge.
Whatever the format, I find that something picked by someone else - keywords or theme -  has the benefit of introducing something I might not have thought of, which knocks me out of a rut and sends me off on a new path.  It gives something to work against.

I'd appreciate even a half month of slack time added onto each Month's Challenge, so they do overlap a bit.
It would mean a Challenge is started at the beginning of each Month, and ending mid-way through the following Month.

3 Month's seems a little long to me, but that's just where i'm at. - As Nick highlighted.

Hello, I'm new here. I just submitted my short for the July Challenge last night, hopefully there will be more submissions. I think you could have a monthly challenge and still give 3 months rolling lead time if that is what it takes, you just need to come up with a new challenge every month with a deadline that is 3 months away.   Many artists have a procrastination streak so having more time does not gurantee a higher quality product. Most will probably spend 2 & 1/2 months procrastinating and 2 weeks working. The way that works is "oh, I would like to submit something. Well I have 3 months to work, I'll get started next week. Well I hve 2 & 1/2 months to work, I'll get started next week. Well, I have... holy s##t two weeks left I forgot all about it!"

Also it seems that people feel they have to go through a whole planning (script, storyboard, layout, design, set design fabrication, etc etc etc) and design process that seems to sandbag their work - only people with high level project management skills can do it that way. Everyone else should follow the Nike principal and "Just Do It".

Of course, a prize for the Animation Challenge would be a great motivator - nothing expensive, maybe a little trophy to go in a trophy case! Or charge a small fee (like $15)  to enter the challenge and use that fee as the "pot" which the winner(s) divvy up (1st, 2nd, 3rd place). That might motivate more people.

well last months word/theme was broad but it was narrowed down to a specific type of serious claymation which was great for some of the better people like vitrol but they wouldn't have the time to make an animation