(1) The ongoing method of Quran Khawani is not right.
(2) Isal-e-sawab is right in itself. In short, Isal-e-Sawab means to recite the holy Quran, durood or offer nafl salah or keep nafl fast or fulfil the need of any poor or needy, or give something in mosque or madrasa with the intention that its reward is credited to so and so person without fixing a time and place or arranging a gathering. (The intention can be made verbally, rather it is better). Such isal-e-sawab is proved from the holy Quran and Hadith. It has been mentioned in detail with proofs in Fath al-Qadir the commentary of Hidaya under the chapter: Al-Hajj Anil Ghair. It has also been discussed briefly in Fatawa Shami under the chapter: Bab al-Janayez. In short, the outcome of all these discussion is whatever was mentioned above.
Allah (Subhana Wa Ta’ala) knows Best
Darul Uloom Deoband