I couldn't agree more with what Bronz has said.
Nothing comes for free in this world, but it is always nice to do a piece for free or for charity to help out, plus it expands your portfolio, but a little free rain goes a long way. Even if a client is paying for my services I would still tell them that 'a bad idea' of theirs is a bad idea, otherwise whats the point in creating anything.
The whole point of employing a designer is because they know what they are doing, anyone can pull a piece of design out there arse, but I can guarantee it wont be as good as someone trained in the industry.
Personally I don't think you need such a large blank area behind the logo, you can set this up in the logo use guidelines, i.e the logo must always have a 10mm gap between any surrounding images/text/etc. (edit. just released this is whats been set already, opps)
What sort of sizes, in measurements, will this logo need to work at? Cant make the typography to fine and not be able to read it, and the same for too bold.