Are used to a certain tradition and then it suddenly changes. My kids can get very used to “tradition.” That said, I think my kids would actually really like donations made in their honor. There might be a piece of them that is a little regretful at not getting a present, but overall I think they would love or maybe come to love a donation in their honor (in fairness my kids may be older than yours—mine range from 9-20).
If it makes you feel better, my kids already do get very different Christmas gifts from their two sets of grandparents. One set kind of spoils them with gifts at Christmas and the other is unable to. My kids don’t feel any less loved by the set that is unable to. They don’t really comment on it and it is a non-issue.
Good luck, OP! I think it’s going to be okay and could become an impactful and meaningful thing for your kids!