How little sewing do you do? Are they your clothes or your children's? I ask because some things, like toddler and baby pants are really easy and quick to make. I repurpose a lot of my and dh's old or stained clothes to make things for dd to wear.
If the stained clothes are too small to repurpose I'd just use them as rags, as pp suggested.
They can be used for sewing or be given to someone who sews. I sew a lot & reuse items from clothes:buttons, zippers, beads, portions of the fabric that are not stained. I've also used fabric for stuffing toys rather than buying the poly-fil stuff.
Then there's rags, braiding into rugs...are you crafty at all? If not, someone who is may use the clothes.
I believe clothes that are 100% cotton can be composted.
For those who do a little sewing: depending on where stains / holes are you - can use a patch (obviously)
- or transform long pants into shorts or capris. (I once did that with a pair of my daughter's jeans. The pants were ripped beyond repair over boths knees, so I cut them and added the lower end of another pair of pants to make the capris (plaid pattern on jeans, really cool). Funny enough, she was already 11y at the time but those were her favorite pants that summer!)
- save good parts for patches
- depending on the fabric: rags etc. (as already said) or "paper" towels for really messy stuff