This is a topic that is near and dear to my heart! From the time my son was born my husband and I respectfully requested that our family members only give ONE gift during a birthday or any other holiday. If they felt that they didn't spend enough $$, they are more than encouraged to make a deposit into his college fund or savings account. My side of the family complies with this, in fact loves that 'rule' and on my husbands everyone but my mother in law complies (both of my sister-in-laws wish that they would have thought of it!!!!) and every year I she pouts for months and tells everyone who will listen (including me!) that I ruin her Christmas/Easter/halloween/4th of July/President's day! This year I did threathen (not an empty threat, mind you) that I will ask my son to choose his gift that he would like to keep from Nana and I will donate the rest to toys for tots. A little mommy dearest, but it worked!
Also, about every season I go through my son's toys with him and we bag up the toys he has outgrown and bring them to children who aren't as fortunate as he his. He is only two and a half and he actaully puts real thought into what he is giving away and the last time put his favorite 'momo' into the bag!
Good luck, this is not an easy situation and based on all the responses you have gotten, it's not an uncommon problem!