First of all, are there any foods or drinks that we should avoid eating?
Well, it depends upon the individual's stomache vulnerability. Most tourists catch at least one time the notoriously known travelers' diarrhea. It is probably due to the climate conditions and to new unknown food being digested for the first time.
I would recommend you to drink only bottled water. You can buy it everywhere though the taste is not the most palatable IMO ( it's a bit bitter).
There are many good restaurants in Madagascar. Personally I have eaten cooked fish, rice, vegetable salads, soups and everything was quite fine. Regarding street stalls, food is very cheap and quite tasty (esp. the sambosas and other fried dumplings) but I wouldn't recommend you vegetable salads mixed with mayonnaise. These dishes stand outside under the sun's heat , exposed to flies and as a result may be contaminated. Just avoid it.
It may occur that meat is served half-cooked. I have rarely eaten Zebu steak in Madagascar not only because I don't like beef so much but because it may contain some kind of a parasite worm.
Resuming, I think there are many good places which may cater for travelers' needs. Many good restaurants with a French flavor inherited by the Colonialism may comply with your needs.
Secondly, myself and my group only speak English, we will most likely be carrying a phrasebook, however I was wondering whether the language barriers would cause any issues
Some upmarket places have English speaking people who cater for tourists. However, most local people speak French. They may speak English but it is probably very poor. Basic French is spoken almost everywhere and by everyone except to really remote villages. Therefore, I would recommend you to learn some basic French. Just basic sentences in order to be communicative at the least level. A few words in French may go a long way to understanding your wishes. Personally, I had taken a self-course in French and learned it by a personal kit. This knowledge helped me a lot though I am far from being considered as a French speaker.
Thirdly, have there been any recent events that would be any cause for concern, such as criminal activity, or natural disasters? I recently heard of an attack on French Tourists and their guide.
Madagascar is a relatively safe country but you must not forget that it is also poor. Crime, prostitution and robbery are derived of the bad economic situation. That means that you shouldn't go out in the streets after darkness. The most infamous is Antananarivo which hosts many unemployed people who sometimes rob casual tourists. It also happened in Diego Suarez . A French tourist was robbed by knife threats at 9 o'clock in the evening.
Money should always be carried in a money belt and I would further suggest that the money belt should be under your pants. Always. Keep a reasonable small amount of money in an accessible place if robbed.
Some places should be visited by an accompanying local guide. That means you shouldn't go alone to deserted beaches or mountain climbs. Always arrange to go with a local, a taxi-driver having police certificate to take tourists and so on. Mount Louis near Fort Dauphin has also known some tourists attacks and also Lokaro Beach. Never go by yourself.
Resuming, I really felt safe in Madagascar. I have never taken risks and nothing happened to me. Very Simple !
Fourthly, I will be taking part in a community project in a medical facility so I was wondering what the best way to help them out would be, ie. Funding a building or equipment.
There are many ways in which you can help Malagasy people. Personally, I went to visit Cente Fihavanana in Antananarivo. This place is run by a group of nuns. It takes care of children who have been abandoned by their parents. Some parents cannot afford taking care of their children. They neglect them and continue to beg on the streets for their living. In the Fihavanana Center I met the head nun, Sister Jeanette who does a wonderful job for the children and their mothers. They always need money and if all of us come and donate a small amount of money , it may ease the problems of these poor people. You can also bring babies' clothes to the centre. They need them very much. There are other institues as well. The Bradt guide gives a lot of details.

