I think with your parents and in-laws you should be able to discuss the issue of gifts openly. If you have started an RESP, then perhaps they would like to contribute. We have RESPs set up and often get cheques for that purpose. Of course grandparents also like to get frivolous gifts too and that's their perogative!
I did see an article in one of the parenting magazines about charity donations, organizations that do it. I don't remember the details, but I seem to think there was one such thing that coordinates the invites and asks for something like $10 per child that goes toward a charity but also provides the birthday child with some money for the parent to buy one collective gift. I thought that was kind of cool.
We also give some ideas on what our kids are interested in to our family and close friends around birthday time. For instance, interested in puzzles and card games, etc.