I will pray for you & your family & friend's family -- this is such a difficult time of year to be in need. I grew up in the 1950s (the "prosperity years") with elderly, chronically ill parents; we were on welfare most of the time. Many Christmases the Salvation Army helped us out; there were gifts for me, plus a box of food for the holiday.
I didn't feel bad taking charity because my mom told me back when I was real little & they were healthy, my parents were on the "giving" side. Anyway, I hope you'll call the Salvation Army in your area. Their purpose is to help people in need, no questions asked.
AND -- during some of our lean years, my husband & I found wonderful gifts for our 4 kids at the local thriftstores -- Goodwill & Salvation Army. Clothes, games, toys, books, decorations -- you name it, they had it. Still do have it all -- I just found wonderful stuffed animals with the new Gund tag still on for my granddaughter for $3 each. . . . and a soft robe for my daughter (again, new, from a swanky store) for $10. Another daughter collects these little bear figurines, & I got her 3 for $2.50. You might also look for things that "go together," like a game of Scrabble ($4 at our Goodwill) & a Scrabble dictionary $1.50. I found a pair of Spiderman pj's for a grandson at 1 thriftstore, & a pair of Spiderman slippers at another. You can also find dolls that look new at the thriftstores, & buy used baby clothes for them.
If you know how to knit or crochet, get some yarn/needles/hook @ Goodwill & put them in a pretty thriftstore basket (lined with tissue paper) along with a promise to teach the girls how to knit. Scrapbooks are a great, inexpensive gift, too, especially for a kid like Sara, who loves cards. She could decorate the pages & put her cards on them. You can get paper tablets, glue sticks, glitter & crayons cheap, & put them in a basket or decorated box & give as an "art" kit.
If there's a Michael's or JoAnn's store nearby, they usually have cotton Tshirts & sweatshirts dirt-cheap. You can give 1 of these, plus a few fabric pens or paints & let the kids have fun. Little girls usually love making jewelry. These stores also have bead kits pretty cheap; but you can also buy old necklaces at the thriftstore & take the beads off & put them in a small zip lock baggie. Buy a spool of fishing line (or other really strong thread) & encourage the kids to get creative. At the thriftstore, check out dressy clothes for women, the things that are marked way down due to stains or tears. Especially great if they have sequins, beads or fur on them. Maybe there are a few floppy hats, too, & a few pair of high heels. Put all this stuff in to a big box you can decorate & call it their dress-up box. (If it's ok with the girls' parents, include some light-colored lipstick & blush, too, & maybe a mirror.)
Sorry this is so long, but when anyone asks for ideas on saving $$, I usually have a few.