But yeah, bad idea. For a number of reasons.
From what I've learned: Birthday Presents are fine, and of course Easter and Christmas if you celebrate those things (not sure about presents giving in other cultures, or the equivalent gestures).
Even celebrating graduations, or other kinds of achievements with a reward such as you're describing is probably fine (although honestly I wouldn't spend that much money unless you're obviously very wealthy compared to them, because it could possibly feel awkward supposing it's a size of gesture that they'd not usually extend in return; then again, people react differently to those sorts of things - it really depends on how personal a relationship you have with them and how large a role you have played in their development as a family and in particular how well you know the kids and how well they know you, and from what ages).
(All that goes for unrelated kids; I'm not sure about relatives, as that depends on individual family dynamics).
It's a very sweet feeling that creates the desire to perform that kind of gesture. Cherish it because it's a sign that the relationship is flourishing. Just don't draw attention away from the positive aspects of it by making a big financial shebang; maybe go with lesser gifts over more time.
Honestly just go with your gut feeling... but I'd actually suggest being careful and choosing wisely the circumstances under how you spend that money, even though I think very highly of the fact that you went to all the trouble to save it up for that purpose.