Thanking people for their gifts is one thing.
Making a charitable donation is another thing.
The two have nothing to do with each other. How does a donation thank a giver for their gift? These people have it all backwards. They should have stated in their invitations "In lieu of gifts for little Hortense, we request that donations be made to charity XXX." You don't get off the hook for thanking people by doing an entirely unrelated thing.
"In lieu of thank you notes, we are going horseback riding!"
"In lieu of thank you notes, we are having our carpets shampooed."
"In lieu of thank you notes, we are getting matching flaming skull tattoos."
Makes just as much sense as what these people are doing. *smh*