My (almost) wife and I are about to ask her brother. Like, maybe tonight! EEEK!
: She's way more nervous than I am. I am basically going to say, "We want to start a family. We want to know the kind of love you have with your new daughter. Unfortunately, we need a little help in that department. So, we wanted to discuss the possibilities of you helping us with that. (gauge his reaction, possibly laugh nervously with him. lol) We are looking for someone related to Catgrrl so the baby will be biologically related to her. We want someone that would be able to maintain an Uncle relationship, even though the child would be biologically theirs. We want someone that is fine with having no say in how our child is raised, who would give up all parental rights, and someone who is willing to sign legal documents attesting this. There would be a sperm donor agreement, payment for sperm, and no legal or monetary ties to the child in the future. Please think about if you would be able to help us in this way." We're pretty sure that he'll be honored and excited to say yes! Cross your fingers for us!
Now, if it's a neighbor, the conversation might be a bit different. Maybe send him an invitation for a backyard BBQ at your place, and then ask? Or set up a time to chat, rather than just knocking on the door. But, eventually, I would say "Hey, ever thought about being a sperm donor? Want to help us have a family?" And then tell him what arrangement you're looking for.