[bugsy]

Both of you are correct they are not circumventing anything. Their plugin is just to track which blogs, which are freely available, you are actually reading so they know how to split your $5 according to what you actually read each month.

They don't have to send the money to anyone. They could keep it for themselves. But if they did no one would use the service as it wouldn't make sense. Instead they donate to the writers personally. It's the same idea as United Way collecting donations and then forwarding those donations to various causes, while keeping a bit for overhead.

Not illegal. If they were hosting content, copying content or circumventing, then it would be a problem.

Their use of official photos and logos of the blogs without permission is not fair use though, that part will have to go. But they can certainly collect donations for a third party according to any system they want without needing the third party's permission.