I love doing things like this. The result will probably be very precious to the person who asked you to do it.
I would not allow the person to pick a difficult pattern. I have a few easy ones I do, adn I would be upfront and honest and tell them that I would have artistic license with the project.
I would probably ask them to bring over a specific type of clothing, all shirts or all jeans or all slacks or all ties or all whatever. I would ask that they launder it first.
I would explain to them any costs that they will have and would set a long time frame for finishing.
Having quilted with the Mennonites who use mostly donated fabrics, they do mix and match stuff and yes, knits are harder to work with, but in the end, the quilt always looks great!
If you really don't want to do this, then it's probably best to not do it. It is something that takes extra time and energy and lots of love and caring, and sometimes, esp if you didn't know that person, it's just hard to do.