From what I've gathered, each bidder makes a donation to one of the orgs on this list (there are more in the comments) and then provides the writer with a screenshot, scanned receipt or confirmation email (with private details covered up, I'd think.) I think it's kind of cool, because if there's a charity you regularly support (or one you specifically don't, for any reason) you get to choose where it's going.
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LOL, crackfic. Oh nooo. *TEMPTS*