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Finish it to practice your free motion quilting, and then put it in the trunk of your car for an "emergency quilt" or in your camper if your family likes to camp. That is what I did with the first two quilts I quilted using my frame and free motion quilting and made all kinds of mistakes. The one quilt, was our school colors, so my daughter used it on bus trips, and now it is in her trunk of her car in plastic, ready to keep her warm if she is stranded on the road some place. The other is in our camper, I only have to look at it a few times a year, but it it is still being used.
If the top lays flat and has no problems that would give you fits during the machine quilting process, I would definitely recommend finishing it for practice with machine quilting. It will be well received if donated as long as it is sturdy and washable. Lots of people can't see past nice colors and fabrics. Something that is getting you down will give someone else a lift!
i learned this at a class years ago from Johanna Wilson of Plum Creek Quilts. When cutting down a HST ALWAYS line up the 45 degree line with your ruler and trim from both sides thus you will not lose your points. Thanks Johanna where ever you are. She had a cute sampler quilt called "Laura Engals Wilder Sampler" after all Johanna use to live on the banks of Plum Creed in Wisc.
the first quilt I did was an Eleanor Burns and I was so proud but when I gave it a second look...right smack in the middle was a block that the seams did not match at all. I had never done applique before but I cut out a nice size tulip and appliqued it over that mess of seams. To this day, every time someone sees the quilt they admire the tulip. Mistakes are opportunities to stretch your imagination.
I'm not sure if I'd donate it. If it's really bad, there are numerous things you could do with it. "Fracture" it with the black fabric, cut it into small pieces and donate them to your local humane society for pet beds, and I've seen a few good suggestions already posted. Don't throw it out - it's got to be good for SOMEthing! :-)
I agree with those who said finish it and practice FMQ. Then you can donate it. It will make a great practice piece.