No way would I quilt for that group. For our local Quilts for Kids group all the fabric is supplied to us via donation or from our own stash never a word said about where to buy it. I know Quilts of Valor have IMHO strict guide lines that you have to follow so I don't quilt for them, but I have sent off a few quilts to soldiers via another local group that sends care packages to troops.
Just remember you are doing this to help others and the ones that finally recieve the quilt aren't going to care where you got the fabric just that someone thought enough of them to give them a hug of warmth in their time of need.