Well, you could just say, "Oh I'm sorry but this quilt has been promised to a child who has cancer" (or whatever disease.) If you like I could teach you how to quilt so that you could make your own for your daughter and then you too could make a quilt for a sick child.
Putting the "quilting" (ball) back in their court so that they can feel they have some worth. Many people don't know the amount of time and material that it takes to make a quilt. By letting them see the work involved they might think twice before just asking you to make them one. Just a thought.