When I started working ~5 years ago, there was a need for these bereavement blankets. They are used when tiny newborns don't survive. We take pictures of them with hats on and in these cozy blankets.
They are made out of three 10" squares of flannel (front, back and pocket - folded in 1/2 diagonally) and ribbon for the ties. Layer: the front first, then the pocket, I usually pin the ribbons to both sides, then layer the back last. I pin all around and leave a space for turning. Watch out for those pins! Next I sew all around ~1/4" in and stitch 1/3 of the top of the pocket (catching the ribbon) from both sides and down. It will literally make a pocket for the newborn to be placed into. Lastly, I make a loop for the ribbons to slide through in the middle. Moms get to take home the pics, blanket and hat, as well as a memory box.