Ronald McDonald house may have sold the quilts and used the money for the kids. Your quilts may not have landed in the children's hands, but it is possible that the money made from the quilts helped Ronald McDonald house to continue to operate.
I don't know if you and they made it clear that the quilts were for the children that were sick. If that is the case, then I would talk to corporate RMD and ask them to find out what happened.