I can see lots of problems with actually implementing such a system. But I can certainly see why the idea is atractive, the amount of waste and overhead in most social services if huge.

The fundamental, unavoidable problem I see is that the system he is outlining doesn't have a connection between those receiving service and those paying for it. Normal markets work because people are motivated to find the best possible use for their money because they are ones that have to live with the consequences.

In the type of system he is suggesting, many people would just mark off the most well known or the one at the top of the list. This would result in charity organizations with most of their money going to advertising. Not exactly the desired direction