In reply to jonny taylor:
If you take it to a charity shop for them to sell and it's mouldy then it'll end up in the bin. Or, depending on the charity, it may go in the "rag bag" and be recycled for its fibres. Some charities even have local schemes where they bag up absorbent rag like jeans a T-shirts and sell them per bag to local garages to use as hand wipes.
I don't know about charities that give stuff to homeless people..