This seems like a very fair policy if the developer doesn’t need the money, as in this example. However, as a user, I hope that setting up a recurring donation keeps the project going and provides motivation to its author.
When you have money, you may like the power it gives you to make incentives so people do what you like. However, in some rare cases, someone doesn't need your money and prefers doing thing how himself likes. If you don't like that, that's your problem and not the one of the people refusing your money.