Just to reiterate the other commenter who was inexplicably downvoted, donations are for charities, tips are profit. It seems completely reasonable to waive app store commissions for a charity, but not something that's for profit.
Charities are not the only entities that receive donations. Political candidates and other advocacy groups (like the ACLU) are mostly donation based non-charities. This year I've seen dozens of restaurants asking for donations to keep afloat. Google may have a more constrained definition for their TOS, but I don't think this use of "donate" is outside the common understanding of the word.
Given the very obvious context of TFA, I don't see how this is relevant. Yes, what makes something a "charity" may be confusing and difficult to define. (AFAIK Google simply has a list of organizations they think are charities) However, it's not ambiguous or confusing at all that this guy is not a charity.
The other commenter was explicably downvoted because this is not a distinction that's made in the English language; a 'donation' in the vernacular does not imply it is tax-deductible, and this is not a distinction that Google itself is consistent with, since GoFundMe is available on the Play Store, and they refer to contributions made on that platform as 'donations'.