Cash per se is always helpful; it's the way that it is presented that offends people at times. While there are certain cultures that would expect cash as a gift (it's considered a perfect gift when it comes to Asian cultures), there are others that would think it is tacky.
Generally, in the United States, cash is not considered a good choice of gift for adults. Although it is always appreciated, a cash gift shows little thought on the part of the giver and there are also issues of how much is enough and how much is too much. Secondly, when multiple people give cash, it might be embarrassing if one person gives a lot less than another person.
However, if you cannot think of a good gift to get the new mom, what you could do is give the cash in the form of a gift certificate. Find out where the mom-to-be is registered and purchase a gift certificate in that store. You could even give a certificate for groceries – which is where toiletries, diapers, and formula is found. It's practical and definitely not tacky.
You can also get a prepaid debit card from Visa, Mastercard, American Express or any other vendor. This way, the mom can spend the money as she sees fit and not be tied to one store. These types of gifts might be more appropriate for a very casual acquaintance to the new mom or someone that doesn't know the mom that well or her preferences.
Another thing you could do is create a bank account for the baby. Start the ball rolling with the initial amount that is needed to open an account, either with a brick-and-mortar bank or through PayPal, which gives good returns on the deposits. This is an unusual and unexpected type of gift, and one that will definitely be appreciated by both the parents and the child when he or she is older. That will also make it easier for them to deposit the little gifts of cash that are usually received during the holidays and their birthdays.
As you see, there is never a wrong type of gift. However, the way
that you give something is what makes it tacky or not. Just like
everything else, it's all in the packaging.