I keep a jar next to my sewing machine and on the cutting table to toss thread and fabric that is too small to use. An old wicker basket is on the cutting table for small usable strips and another wicker basket for odd shaped usable pieces of fabric. The unusable strips go into a small basket and will go to the birds for their nests in the spring as some quilters here have recommended - love this idea!
This is a great post with so many wonderful suggestions! I have to finish reading what everyone has posted.