An actual online contract between people from LOMCN just insn't possible. You can bet your ass a handful wont be 18+ meaning they cannot legally sign a contract of that type anyway.
Also, in all fairness a lot of people on this site are stupid, and it would take me less than an hour to write a "contract" which legally says I can do whatever the hell I want with the money, but most people will think it means only the server/hosting costs.
Then you have the people who will just outright ignore the words of the contract. The people who will donate without looking at the contract, Unfortunately it is almost impossible to completely remove the threat of scams like these especially when you work in such a grey area anyway.
Even with all the evidence in the world and an iron-clad contract signed with the blood of a god who oversaw the event and can testify in court, it really still wouldn't be worth the hassle and unrecoverable costs (like travel) to actually take someone to court for it and watch them receive a "telling off" and nothing more
People are making donations to the server, when you make a donation you are basically stating you are giving the money and want nothing in return for it. When you "donate" you are agreeing he can use the money for anything related to the server running as long as he can justify it. He could pay his brother the entire sum to get him a drink from the fridge so he can continue to work on the server, and as far as the law is concerned, thats above board.
Should you take command of your donation and direct it, your asking for something in return (control of your donation) and therefore your paying to play the server leaving the door open for possible prosecution.