The funding source is an ethereum address from which clr.fund can receive matching funding using the allowance mechanism. It could be an externally owned account or a contract (such as DAO).
To become a funding source the address should be added to the list of funding sources by the clr.fund administrator (the owner of the FundingRoundFactory). At the end of each funding round clr.fund checks token allowance for the FundingRoundFactory contract address and transfers allowed amount of tokens to the matching pool.