I got all this beautiful, fancy yarn for less than $13.00. I didn't get it at a yarn store or a church bazaar. I'm not a member of any knitting club although sometimes I wish I was. I would take donations of unwanted yarn in a heartbeat.
The price of yarn is always going up. It never comes down. When the dollar stores started carrying yarn it seemed like a pretty good deal. And it was back then but your dollar only buys 109 yards per skein now when it did get you 220 yards a year or two ago. Not so much a bargain now. You'd do better to catch Joann's Yarnormous sale which is going on now (12-25 to 01-12). Basic 4 ply worsted "Big Twist" yarn for $1.99 a skein of 380 yds. It's a no-brainer. I stock up every year. I never pay full price for yarn. I wait all year for this sale to come along. But there is a better way to get the pretty fancy yarns cheaper than that.
If you're on a fixed income or a very low yarn budget like I am then you need a way to get some of that fancy yarn that few of us can afford. The sparkly stuff, the variegated, eyelashy fibery stuff. All the prettiest yarns cost at least six dollars or more per skein. I'm much too frugal to pay that much.
So I'll let you in on my little secret. Yes, you can join a club or a church knitting group and maybe they would donate you some yarn. You can sometimes pickup bags of donated slightly used or leftover yarn from a thrift store. But (and I'll bet you never thought of this before)...
Right before and after Christmas is the best time to find hand knitted and crocheted scarves at Goodwill. How often do you wear your winter scarves? Hardly ever I bet. So the yarn is still pretty new. People do the "out with the old and in with the new" thing around this time of year. You can buy some pretty fancy handmade scarves for .99, bring them home and wash them in lukewarm water because you never know how much wool the yarn may have. Spin them out in your washing machine then hang them up to dry. Unravel each scarf and wind up the yarn into a new ball. I only use a smallish amount of yarn for my projects because I make mostly dolls and soft toys but you can get a good skein out of each scarf - sometimes more.
You could also try your hand at unravelling sweaters too but in my experience, the selection is much less in quality and variety of yarns than scarves and harder to unravel. They are also more expensive and you don't get as much yarn for your dollar. Go for the scarves! My favorites are the sparkly sequin yarns and the variegated fibers.