Agreed. And I think it's important to consider just how small 1% really is. I doubt the fuzzies associated with using the credit card would actually be as small as 1% of the fuzzies associated with a 100% donation -- fuzzies just don't have high enough resolution. So I would fear, a la scope insensitivity, people getting more fuzzies from the credit card than are actually deserved from the donation. If that's necessary in order for the fuzzies to exceed a threshold for carrying out the donation, so be it; but usually the problem is in the other direction: People get too many fuzzies from doing too little and so end up not doing enough.
In case you missed the notice at the SIAI Blog, the Singularity Institute's next Challenge Grant is now running - $100,000 of matching funds for all donations until February 28th, 2010. If you want your donation to be tax-deductible in the U.S. for 2009, donations postmarked by December 31st will be counted for this tax year.