I'm not familiar with tax deductible donation related law, but in that case, universities need to make sure they aren't breaking the law. Is that what's happening?

As far as I can tell, saying "get really good test scores or pay us a million dollars to get in" is not illegal.

No university says "get really good test scores or pay us a million dollars to get in". Universities get to keep their pretense of having objective admissions and that you can't buy your way in, and the donor gets admissions, personal advertising, and a tax deduction.

There's a reason no university simple states a price on their admissions page