I've made charity quilts for years. Sometimes I make them with my fabric, and sometimes with fabric that has been donated. Other quilters who work with me from time to time use a combination of my fabrics, donated fabrics, and their fabrics. From the start, we had a rule that if you made a quilt that you liked so much you just had to keep it, you could do so provided that you made a quilt at least that big from your own fabric to replace it. In 18 years, there have been about five quilts out of 426 that have been kept and replaced.
Regarding the matter of where to donate, we usually donate to homeless shelters or kids' shelters. But because we had staff take some quilts for their own use, we have a policy that we personally deliver the quilts to the recipients, and the quilts are theirs to take with them when they leave. The people choose their own quilts and, since we take a couple extra quilts, everyone gets a choice. If a shelter will not let us meet with the residents, we don't donate there. Generally, it is okay with shelters.
These two rules have helped greatly with getting donations to the intended recipients.