The title "Sir," awarded to knights and baronets, ultimately derives from the Latin "senior," meaning older or elder, which evolved into "sire". In the Middle Ages, it came to mean an important older man and then acquired the sense of an important or distinguished man in general. It was then used to mark out both men given knighthoods and even to address the monarch. Eventually, for knights, the final "e" was dropped.
The standards for knighthood no longer involve military activity -- recruiting and leading men on behalf of the monarch or his representative. Today, a knighthood recognizes other forms of service to the nation or special accomplishment in one's field.
Knighthoods and peerage titles cannot legally be purchased.
Edit: Donating a lot of money would most likely be considered to fall under the heading "service to the nation". Moreover, there's never any absolute guarantee that a donation to a party will get you a knighthood. And I repeat, you can't call up some office and say, "I'd like to buy a knighthood. How much do they cost these days?"