What a lovely project. I commend you and your friend on the idea!
I haven't made too many albums myself, but I've always loved the ones called paper bag albums. They are pretty easy to make and you can use a variety of supplies to embellish them.
I would suggest googling paper bag albums, click on images at the top, and check out all the cute ones shown. If you then click on the picture, it will frequently have a link to a blog or tutorial showing how to make it.
Good luck, and again, I think it's a great project.
PS if you send me a PM with your mailing address, I think I could donate some things to get you started.