I have deducted the cost of fabric used to make donation quilts, I think prism99 is right that it's only a small percentage that is actually calculated, we itemize and have someone who does our taxes with us, it's just to hard to keep up with all the new laws for what is or isn't Deductable.
I think you would get a better write-off if you donated the fabric to Downey quilts for kids as opposed to goodwill, if you give to goodwill IRS only allows garage sale price for deduction, not purchase price.