He's not making a profit. Meaning he's actually paying out of pocket to allow neighbours to lend stuff to each other. Yet he's abandoned his code of ethics?
But many ads are those that track you across pages and use many of the same stuff as Facebook to show you products. So if you're uncomfortable with that, it's important to put pressure on that.
If he were just throwing up Google AdWords /FB ads or whatever he would be participating in an ecosystem that is unethical for many. It's helping to support a good cause, but wouldn't it be nice to get good things without contributing to an unethical system in the process?
But likely in complete compliance with GDPR... As Adwords and FB Ads would be in compliance.
That is the entire point of laws like GDPR, it has nothing to do with User privacy and everything to do with Ensure their can be no competition to Adwords or FB in the future.
"But it's such a small site/ the person's side project" all the more reason to stay away from this. Having a code of ethics where you end up using the most profitable option anyways is not a real code of ethics
The point of ethical judgement is that it's _not_ the best choice by other factors