I'd try TwentyHost. I host all my sites with them, have done for a long time now, and they are very good. I found them originally from an ad in the back of WebUser. They are really helpful and if you are new to this game, they explain things in non-technical ways. I don't know what sort of discount they give for charities, but I do know they give something. There's nothing on their website as far as I can see, so you'd probably need to ask from here, unless you can see it on their site.

Google ads are based on the content of your site, so they will be about cats if your site is about cats etc. You choose the size and shape of the ad block and Google give you some HTML code to add to the site. The ads appear where you place the code. Google Adsense is the best and easiest way of making a bit of spare cash, but don't expect loads.

I think you'll need to set up a PayPal account for the charity, and register the charity's bank account with PayPal, other wise it will look very bad if the donations are going to a personal account. Would you click a donate button on a website and continue if PayPal said the money was going to John Smith's personal account? You need the account in the name of the registered charity. When you have done this, you can get all the code by logging into PayPal.