I believe it is a term coined by Rev. Peter Marshall, a Scottish born Presbyterian minister who was chaplain to the Roosevelt administration during WW II.
It means that if you give something to someone, instead of expecting someone to reciprocate or pay 'back' the gift or favour you ask them to pay it 'forward', to someone else in need.
I bet it could apply to fat quarters as much as to anything!!
The family in the quilt block below which is turned on its side, my apologies, have done the most remarkable job in human history of paying forward!
Maurene
Nativity
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