I’ll be the first to answer your questions directly:
1.” What’s up” is that they’ve realized that it is economically efficient for them to offer prizes, particularly when the prizes are donated.
2. No, as long as it’s economically efficient.
3. No, as evidenced by all of the charity given without the incentive of a prize; however, given the choice between donating a dollar with the chance of earning a prize and a dollar without that possibility, any rational actor would choose the former.