This is the same concept as the Boom Block (Boomerang) exchange here on the Quilting Board. Check it out. Folks send fabric of choice and make a blocks for others and in the end each swapper has enough blocks for a quilt made from their fabric. A new round of Boom Block Exchanges will begin in January I believe. A well run exchange and very conversational and encouraging. Look at one of the past threads to see the lovelies.
I wish my quilting guildl/group would do something like what your group is doing. It sounds like more fun than a BOM and allows for individual creativity in the final sampler style quilt.