Here's how it works from their FAQ:
How does the FreeRice vocabulary program work?
FreeRice has a custom database containing thousands of words at varying degrees of difficulty. There are words appropriate for people just learning English and words that will challenge the most scholarly professors. In between are thousands of words for students, business people, homemakers, doctors, truck drivers, retired people… everyone!
FreeRice automatically adjusts to your level of vocabulary. It starts by giving you words at different levels of difficulty and then, based on how you do, assigns you an approximate starting level. You then determine a more exact level for yourself as you play. When you get a word wrong, you go to an easier level. When you get three words in a row right, you go to a harder level. This one-to-three ratio is best for keeping you at the “outer fringe” of your vocabulary, where learning can take place.
Who pays for the donated rice?
The rice is paid for by the advertisers whose names you see on the bottom of your vocabulary screen. This is regular advertising for these companies, but it is also something more. Through their advertising at FreeRice, these companies support both learning (free vocabulary for everyone) and reducing hunger (free rice for the hungry). We commend these companies for their participation at FreeRice.
Who distributes the donated rice?
The rice is distributed by the United Nations World Food Program (WFP). The World Food Program is the world’s largest food aid agency, working with over 1,000 other organizations in over 75 countries. In addition to providing food, the World Food Program helps hungry people to become self-reliant so that they escape hunger for good. Wherever possible, the World Food Program buys food locally to support local farmers and the local economy. We encourage you to visit the United Nations World Food Program to learn more about their successful approach to ending hunger.
So, how big is your vocabulary and can it feed the world?