There's nothing wrong with giving out free VPS servers. It can be beneficial to both you and the party that you're sponsoring. The only advise I can give you is to make sure you giving them away to worthy causes. Don't hand them out like trick-or-treat candy because it'll serve no useful purpose at all.
GOOD - I gave a VPS to theraptor so they can use it as a sandbox to continue development of The Hosting Tool.
BAD - Giving out a VPS to mtwiscool so he can attempt to develop a Win95 hosting platform.
See what I'm saying?