I made these padded letters over the summer, along with the matching board (with a lot of help from Mama White!) The padded letters are made of cardboard, found at Michael's or Hobby Lobby, Jo-Ann's etc. Then I covered them with quilting padding, and then with my choice of fabric. Then I took alternating fabric to make the edging of each side. Everything was glued down with a combo of hot glue and tacky glue.
The Board was a bit more difficult, because it involved holding down the fabric around a bulletin board and using a STAPLE GUN! The buttons were made with a button kit and extra fabric, and sewn into the board to hold the ribbons down! Voila!