when a company has a fundraiser for an individual and her children but the individual dies before the funds were disbursed what happens to those funds

Children cannot own property, so they would have to be in trust for the children or in a Uniform Gift to Minors Account for their benefit, or maybe a Section 529 account.  All of these can be managed by the guardian but are for the benefit of the children.     If the fundraiser was meant for the individual and the children, the funds should go into some sort of account for the benefit of the children, not to the guardian.