Ways to recycle unusable clothes?

Any suggestions on ways to truly recycle old clothes or other textiles that are no longer usable? I always accept any hand me down kids/baby clothes that family/friends/neighbors offer but sometimes they are too stained or ripped that I don’t want to use for my kids. I also have some old clothes with stretched out elastic waistbands for example that can no longer be worn.

I am looking for other solutions other that using them for rags- I don’t need that many rags! I have done the trashie bags before, but that involves spending money and seems like there are mixed reviews on what trashie can actually accept and what the do with the items they receive.