I've never thought about it before, but I suppose it's a way for you to provide some commitment from yourself as a condition for those you're crowdsourcing donations from.
If you don't deliver on your part, they don't have to pay.
When I was in high-school we did everything from shaving our heads, to having your legs waxed in front of the whole (boys) school.
I raised thousands of £ for charity this way, more than I could ever raise by myself at that age.
Regardless, one of the nice things about the practice is does mean people are at least somewhat committed to a cause they are raising funds for before they go soliciting. It also deals with the irrational part of the human psyche and moves the action conceptually from the person begging to the person trading which can have an impact on how people perceive it.
So if you see a friend is trying to do some personal achievement, and you think the charity is a worthwhile one to donate to; why not combine the two and help your friend achieve their goal whilst also raising money for a good cause.