I noticed that Project Linus website has this notice: "...Coordinators must be non-smokers and live and store blankets in a smoke free environment. Project Linus blankets must be of excellent quality and free from contaminants. Special care should be taken to ensure that blankets are free of smoky smells or any chemicals which could cause problems for a child. Ensure that blankets are free of pet or animal hair. Hospitals will not accept these blankets, and they will most likely be discarded. Recent studies show that laundering these blankets does not remove contamination, and in some cases can even make it worse. Always check blankets carefully for pins, and remove any embellishments such as buttons that could be swallowed."
I do wash finished items for donation, but don't always wash fabric before using it. I'm not allergic, but now that we don't have cats any more, I don't have hair all over my house and would not it on my new fabric. Two local quilt shops here have resident dogs, one is a hairless shar-pei, and the other is an elderly golden retriever. I enjoy both, but frankly I think pets are better kept at home, not in a retail store. My mother was very allergic to cats and once we went into a thrift shop that had two extremely furry long-hair cats that slept all over the merchandise. We had to leave right away as she got all itchy just going in there.