Yes, I generally do give a gift if someone is having an engagement party. But TBH I hate giving money, it just doesn't sit right with me iykwim? To me money just isn't a gift. I much prefer to buy something personal/sentimental for people that they will keep and remember. I still remember who gave us what for our engagement and wedding (we got engaged 8 years ago and married 6 years ago) and cherish those things. But the money we were given is long gone and to be honest I can't even remember who gave us money or how much. So to me it's not a true gift (I'm not sure if I'm wording this right...).
Given that it is family, I think it would be nice to give them something special. I've often given the 'Love' book from the MILK series (a coffee table book with a beatutiful collection of photos representing love) as an engagement gift. But even something like a nice photo frame for them to put a picture from their engagement party in is nice iykwim?
If it was me, I would try and give something a little bit sentimental because they are family. Or give nothing at all. Given that she has said no gifts I don't think they would be offended if you didn't give anything either.
I can't go to a party empty handed so I always give a gift, and I like to give a gift that I know the person would want, so if it is money that they asked for I would give that. I'd rather give a present but also don't like to give a present that they will never use anyway!
Just my two cents worth though.
BTW we had a wishing well at our wedding and I personally wrote each thank you note telling each guest what we put their money towards, (lounge suite and coffee table) and I'll always remember that without our guests gifts we wouldn't have been able to purchase those. It didn't matter to us if people gave us $1 or $100 we thanked every body the same way.
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