You can turn a handkerchief into a baby bonnet with minimal hand sewing skills. A hanky baby bonnet is a gift that becomes an instant heirloom. The mother puts the bonnet on the baby to bring her home from the hospital, then she packs it away. When the child grows up and gets married, she carries the handkerchief as her "something old" item.
Lay the hanky out flat on your working table. Fold the left side in by approximately one inch, or enough to fold over the entire lace edging and a little bit of the body of the hanky itself. Fold in the right side by approximately three inches.
Thread a needle with some thread that matches your hanky. Make a running stitch along the folded portion of the hanky on the left side. The running stitch just weaves in and out of the hanky; make yours relatively loose and widely spread out.
Pull on the needle to gather the area where you made your running stitch. Fold the hanky as you do so, leaving the folded edges on top. The gathered section will form the back of the bonnet, so it should meet in a round shape. Make one or two more stitches to hold its shape and then knot and cut the thread.
Cut two lengths of ribbon, each 10 inches long. Fold in the cut ends and make a few stitches to secure them to avoid fraying on the edges. Sew one end of each length of ribbon to the front lower corner of the bonnet, then tie in a bow. Make a large "X" stitch to attach the ribbon so the mother can easily remove it later when it's time to save the handkerchief.