I don't do it so much any more but sometimes I buy bags of mixed fabric from the thrift stores. I go through it and I do trash some of the contents (junked up little scraps mostly), but most are just unsuitable for me and so get folded up nicely and put back in the bag and then I just donate the bag back to the store
Or, I collect other non-quilting fabrics until I have a bag ready to go. We are all looking for different things -- someone else is going to see that gorgeous piece of black brocade I left folded on the bottom of my most recent bag so it could be seen and want to buy it. Or someone else will want the felt pieces I put on top, or be thrilled with the solid poly blend broadcloth in the middle.
Bleeders or known problems should be put out of everyone's misery... Here in the Seattle area we do have last stop textile recycling too, for things like gross pillows. It's rare that I consider something bad enough to toss, but I shred the fabric to make sure no one snags it out.