The in-game micro holiday is inspired by a charity event hosted every October on Scarlet Crusade-US. People make level 1 gnomes to run from New Tinkertown to Booty Bay, and the funds raised go to support the development of a breast cancer vaccine.
If you've never joined the event, I recommend it! It's always great fun to watch a herd of gnomes dodge murlocs and tigers on their way down to Booty Bay.
Who's making money during this event, and how? (for them to then donate)
The donation links go straight to the fundraiser on the Cleveland Clinic's site to support the Tuohy vaccine for breast cancer. None of the race organizers collect the money themselves.