My instincts are that its a way to feel good about buying yourself that shiny new iPod. A way for the marketers to help assuage your guilt of being just another consumer. Isn't it better, especially for the recipients of any donation, for people to donate directly? Of course, you'll want to research the organization you donate to pretty thoroughly.
RED has a mixed message that may create confusion among consumers. On the one hand, slogans like “Buy Red. Save Lives” might be taken to mean that consumers are making a direct charitable contribution. But then RED says that the campaign is NOT a charity but a sustainable business model: “The company pays extra – the purchaser does not.” This lack of clarity contributes to the Byzantine structure shown above, in which the consumer never knows who is paying how much to whom.