I love the independent attitudes of the quilters who have replied and agree wholeheartedly. My opinion is that we should use fabrics for charity quilts that we would find acceptable for use for ourselves.
Personally, I tend to shop at the LQS more than any other place but have stocked up on good finds in the clearance room at 1/2 price for planned charity quilting which ends up to be less expensive than most other retailers. Of course the selection is hit or miss.
I did find a local retailer with very inexpensive quilting cottons, many made by the same manufacturers that I often see at the LQS. Last time I was there, the price was 1.99 to 2.99 a yard and they had a really nice selection of kid-type prints. Mixed reviews on customer service though they've always been pleasant when I've been there. In the Boston area.
http://sewfisticated.com/