I think a simple, heartfelt, "thank you" is all that is required. If she's giving you the fabric - she obviously wants you to have it, so don't feel you have to make something as a return gift. This can go on forever and you'll just feel more and more resentful. That's silly. As some of the others said - a small token at holiday time is fine. Or how about bringing her some homemade cookies next time you make a batch? Does she live alone? Maybe you could invite her for dinner, or lunch, or afternoon tea. Do you have a flower garden? Cut her bouquet of flowers - or buy a small African Violet. There are a lot of things you can do to show your appreciation that don't involve your sewing machine and limited time there.