I think you have to break the situation into two parts. When she notices that something she gave you is missing:
1) Profusely thank her for her generosity, for thinking of you & DH and giving you the "gift." This is what she would really be hurt about the most, that her thoughtfulness & generosity isn't being appreciated or acknowledged. (She just
thinks the gift has to
stay around for that appreciation to be acknowledged.)
Then separate out and make the gift itself UN-personal to you, (i.e. you didn't
need it) YET keeping the initial generosity of the act intact for your DMIL, which is what she would really be upset about that the gift is gone. It's just symbolic.)
You have to RE-state that you've told her several times NOT to give you guys stuff as you & DH are so
blessed to already have everything you need and so you found someone / lucked into someone who wanted the exact item that your DMIL
generously gave to you, so you passed on
her generosity to someone
else who really, really, really wanted it or could use it. And mention how happy they were to receive your DMIL's generosity. So basically, your DMIL's generosity was being passed onto to yet another person - someone who could fully appreciate the gift, rather than be stuffed in a box in the basement.
You aren't really lying. Even if you give the "gifts" to charity,
someone else WILL be quite happy to receive it at a great price at Goodwill. Someone in the Mob would be happy to find a brand new mauve sweatsuit at Goodwill after they snorted all their money up their nose.
If she gets hurt or tries to make it personal, go back & reiterate that you appreciate HER and her thoughtfulness about the act of giving the item. But the gift itself, is a totally separate issue. YOU didn't need it and someone else really, really did want it. ASK her (sometimes
situations don't really go into the brain or
change until you ASK people a question to make them THINK it through and it gets reordered in a different way,) ASK her: would she really prefer her gift remain in a box in the basement, OR being passed on to someone else who could really use her generosity? Didn't she
give it to you because
she couldn't stand the idea of it NOT being used in her own home? So NOW it is.
You may have to point out how you
purged a few things from your home that YOU & DH bought and no longer need/use. Again it's not
personal. You guys are purging other stuff out your home too.
She may think it through to realize the act of being appreciated for her giving is enough and she can let go of you needing to keep the gifts.
OR if she answers she'd really rather you guys keep it and she's still extremely hurt, then you have your answer for the next time she asks about the next missing item. As a PP poster said, "Oh, it's in a box in the basement for safekeeping." And still toss or donate it.
And under NO circumstances do you put up that fire pit. That is enabling the situation and giving mixed signals. You don't need it, don't put it up. You let her know you gave it away or it's also in the basement or being "stored away" [at Goodwill] until you get around to putting it up.