I can not come up with a definition myself-but here are some sources that may help your group come up with a defintion that suits your circumstances. Hope this helps.
http://www.quiltprofessionals.com/quiltdirectory/artquilthistory.htm
http://www.quiltpower.com/Definition_of_an_Art_Quilt.html
http://www.saqa.com/aboutus/index.aspx
http://www.answers.com/topic/quilt
http://www.squidoo.com/artquilts