Love the idea of donations. There is no such thing as "ugly" fabric in my world, just haven't found the right project for it yet. I would also list the options for buying fabric (Walmart, Hobby Lobby, Hancock's, JoAnn and the LQS) in your area.
Enjoy your project! The 4-H kids are great and they come up with some awesome things. I've seen some of their quilts and garments at local fairs and I am blown away by them.