All donations from viewers go towards the Child's Play Charity. The charity was started by Penny Arcade to help children stuck in hospitals all over who need a little cheering up in their lives. Child's Play purchases games and hardware and sends it to a huge number of hospitals around the world. The guys at Mario Marathon 5 do this every year. They play a variety of Mario games and donate everything towards the charity.
How much they play is entirely up to the viewers and those donating at home. If you want to see them play more, then donate! Even if it's just a few dollars, every little bit helps and it's for a great cause. They do this every year out of the kindness of their hearts and all expenses are paid out of their own pockets. Even a mention of their marathon on Twitter and other social networks would be quite helpful to their cause.
They also do various giveaways of small prizes for donators and those who mention the marathon via Twitter. At present, they're working on completing Super Mario Bros. 2. They have the original SMB, The Lost Levels, Mario 64 (100% 120 star run), 100% Mario Galaxy, and all of New Super Mario Bros. Wii unlocked and still left to play.
More information:
Mario Marathon 5 website
Mario Marathon Twitter
Child's Play Charity