Sacrificing the aqeeqah is better than giving its price in charity, indeed, giving the money in charity instead of doing the aqeeqah does not serve the intended purpose, because the purpose of aqeeqah is to draw closer to Allaah by means of offering this sacrifice.
Ibn al-Qayyim said in Tuhfat al-Mawdood bi Ahkaam al-Mawlood, p. 164:
Offering a sacrifice when it is prescribed is better than giving its price in charity even if one gives more than the price, like sacrifices offered during Hajj and at Eid al-Adha, because the aim is to carry out the actual act of slaughter and shedding the blood, because this is an act of worship which is mentioned alongside prayer, as Allaah says (interpretation of the meaning):
Therefore turn in prayer to your Lord and sacrifice (to Him only)
Say (O Muhammad): Verily, my Salaah (prayer), my sacrifice, my living, and my dying are for Allaah, the Lord of the Aalameen (mankind, jinn and all that exists)
In every religion, nothing can take the place of prayer and sacrifice, hence if many times the value of the sacrificial animal for tamattu' and qiraan (Hajj) were to be given in charity, that would not take the place of the sacrifice. The same applies to all kinds of sacrifice. And Allaah knows best.
The Standing Committee was asked (11/449) about paying money instead of doing the aqeeqah. They replied:
Two sheep should be slaughtered for a boy and one for a girl; it is not acceptable to pay money etc instead.
And the Standing Committee was also asked (11/440): Is it acceptable to buy meat instead of slaughtering the aqeeqah?
It is only acceptable to slaughter one sheep for a girl and two for a boy.
And Allaah knows best.
Reproduced from Islam QA