The tax credit that applies on the first $200 of charitable donations is not necessarily limited to the donation that an individual may make to one organization. If they gave $100 to the United Way and $100 to another organization, then that's the first $200. Anything above that amount that the individual chose would receive a credit at 29%.
Essentially, the system is designed to provide an incentive for people to give more. It provides a credit at the first income tax rate on the first $200, and then at the highest rate for anything above that, which, generally, for most taxpayers, is well in excess of the tax they would pay on the income they earned to make that donation.