Agreed about shrinkage. Most stuff that goes into hospitals get washed in hot water. Also acrylic baby yarns tend not to be too scratchy or rough for babys and preeemie babies. I don't think I have heard not to plant fibers as I did donate a bamboo nicu hat without problem. I think Bevs country cottage has a whole bunch of info on knitting donateable items
PS I think it is bevs...