My "extra" yarn always gets given away in some shape or form. I have given yarn to my daughters' school for their craft cubby. I have made baby blankets and newborn hats for one of the local hospitals. I have sent yarn to a friend of mine in Ontario that helps to run a senior's group that makes baby blankets for Toronto's Sick Kid's Hospital. I have used it as "training yarn" when teaching the kids how to do various things.
Right now my "extra yarn" project of choice is winter items for the Parent's Centre at my daughters' school. I make up stuff as I "find" yarn, and send it off for kids that come to school without hats, mitts or scarves.