My son was recently hospitalized for 5 months at a major Children's hospital. While we were there, many nurses commented on the various quilts and pillows he has, and it led to conversations about donated items. Many times they told me that they are always hesitant to give the donated quilts to families because of hospital policy that mandates that if the family doesn't like or want to keep an item, it has to be incinerated. Once it's in the room, it's considered "given", so they can't offer choices of color or style.
Those nurses who are quilters themselves and are aware of the time and money invested in making a quilt were the ones who had the most trouble with dealing with donation quilts. One told me that she would make kid and teen friendly quilts to "trade" with donations that weren't maybe so appealing, and she's take the donations to a nursing home or other charity where the style or fabrics were more likely to be appreciated.
My son was the recipient of some really fun, cheerful pillow cases as well as a fleece blanket-- and it is a lovely thing to do for kids who are hospitalized. It's just that some of the donations are maybe not carefully considered for appropriateness.
Another point that the nurses told me was that they get a very high percentage of baby and toddler girly themed quits, but far fewer that are gender neutral, boy themed, or teen appropriate, and that those are always very appreciated.