You could make the Respected Prisoner a tradeable item on the marketplace.  This would let people who dont wish to spend real world cash on a game to have the benifits of being respected.  Additonally there is always someone willing to throw more real $ out just to get a head start. 

The people who would purchase respected status anyway might buy from the marketplace instead, but what does it matter you still get the $5.  It doesnt matter if they directly buy it or someone else buys it for them.

Everybody wins.  Frugal players get a chance for respected status.  The mommys credit card crowd get jump started.  And you make more money.

The only problem i see is that you can convert $ directly into levels and stats via eating candy.  This could allow for very young people with high levels. 

In that case, it would make more sense to be able to donate for another player. Again, it makes no sense having premium items being available with normal cash for the various reasons outlined in similar threads.