I am truly shocked by some of the comments on here.. However OP remember this is on "aibu" and you did ask! Lol :)
I can see both sides of this argument.
I think it is lovely that you thought to make a donation instead of presents and gave them notice so as not to embarrass (if that's the right term!) them on the day.
Perhaps it may have been better to buy the kids in the family gifts? Hindsight is a wonderful thing.
The money is gone and you cannot do this - does your sister know you cannot (morally) withdraw your donation?
Perhaps you could right a little card to each of your family explaining the reason for your donation or what it could help pay for?
I gave an oxfam goat to my uncle last year (and a couple of bottles of wine) as I had no idea what to get and thought it'd be a nice gesture. I'd be happy to receive that, however I can see why some people think it's lame! I hope he didn't think so! I know he was shocked though! Lol (I know you haven't bought goats by the way!)
You said that on the phone to your sister she said she wouldn't be donating, did she say anything else? Or did she just hang up and you haven't spoken since?
It's sad that she feels sad about your choice - however it was your choice in the first place. Remember that! Christmas is a time of giving and being with your family (and all that religious stuff I shalln't go into) 

Enjoy christmas with your loved ones - life is too short to worry about such small things. At the end of the day you did what you thought was a nice thing to do and that's that!
Have a lovely christmas! X