Yes you are mad Nix, but no more so than a lot of the people who enter FLM. As any mountaineer will tell you, no point in tackling Everest if you can't climb shorter peaks. Don't worry though, you have plenty of time. If you are willing to put in the hard training during the winter months you should be OK. Start now, try building up your mileage gradually, and try some longer races, 10k, 10 miles, half marathon. This will give you an idea of the challenge ahead.
The ballot gives you a 1 in 4 chance these days so don't raise your hopes too much. Some folks think that the FLM is the only worthwhile marathon in the world if you read some of the comments and reactions on these forums. This is nonsense of course, there are plenty of others to consider if you don't get into London, wonderful event though it is.
The charity issue is your decision, generally the better known the charity is the more money they will expect you to raise. Most of them want between £1000 and £2000 minimum.
Best of luck to you, hope you get in.