I think the idea is that you knit the cosies from scraps of wool left over from other projects or odd part balls picked up in charity shops so the cost is below the donation to the charity. Many elderly people who grew up knitting and enjoy it and are perhaps housebound through infirmity and dependent on care, like the feeling that by knitting the egg cosies they can make a contribution towards helping other people rather than being a recipient all the time.
DD, into almost any needlecraft, buys no end of materials from her local charity shop which has a basket with wool remnants, odd embroidery and tapestry threads, short lengths of ribbon and lace etc etc all for 10p each. She also gets longer fabric remnants there. A 1950s cocktail dress, plus a length of dress velvet was turned into the most sumptuous princess dress and cloak for DGD.