For 3 years we mostly scrapped the 1000s of 20" and under kids bikes that we didn't have the capacity to repair or store. Four years ago we came up with the idea for Cycle of Giving, a 24 hour kids bike building marathon. We invite volunteer mechanics from the city's 7 community bike shops, the for-profit shops, and anyone else who wants to come out to do a shift to spend between 6-24 hours building as many kids bikes (20" wheels or less) as they can. Last year we built 315 bikes in 24 hours and distributed them, free of charge, along with helmets and hand-made cards, to 14 different inner city youth service agencies.
It's a fundraiser too, although we never seem to make much money (this year we got sponsors to make ends meet). But it's a damned good time with great bands (this year via the pedal powered sound system), amazing food, lots of glitter and eggnog and a whack of rad folks drinking too much coffee and slinging wrenches all night long. We always get great media too.
The remaining kids bikes go to the bike repair vocational program for folks recovering from addictions in the local correctional facility. More details on that in some other email.