a 5 yr old with a $25 a week allowance? 
On it's own, you can't really judge a parent for that.
My kids (4,11) get zero allowance but then again it's not as if we don't treat them on a regular basis. Like if we go into 7-11 and my gal wants an ice lolly, she gets one. If she had an allowance she could buy it herself. Who is to say one is better than the other.
My son gets money for washing the car and stuff but with the homework load they get out here now, it'd be damn near impossible for him to get the things he needs from money for chores. They just don't let up on the kids in the schools out here.
So, we all do things our own way. I do presume you are a parent and not one of those non-parents that likes to tell parents they are doing everything wrong, right?
Anyway - kids tend to be generous. Out here whenever we see a disabled beggar in the street (a common site, sadly), my 4 year old asks me for money, goes over and drops it into their cup and gives them a respectful high "Wai" (The Thai version of the Japanese bow). It's lovely to see. It always gets a surprised smile because she doesn't look Thai and they don't expect the Wai. It's never prompted, it's just a child seeing someone in need and helping out.
So anyway - the young girl in question did a wonderful thing. Saving her money and giving it to charity - I think that in itself says the parents are doing something right, don't you think?