There are almost always two bags sitting beside our refrigerator:1. recycling
2. donations and other items that should leave our home
to make our tiny space work we try to enforce a 1-for-1 exchange rate so that for every treasure that comes into our home, something less treasured should leave. We often carry our bags of discarded treasures to Goodwill on Mission St between 18th st and 19th st but we regularly plop the bag on San Carlos St behind our house -- it's our offering to the Mission District Gods.
Yes, I know, the 1-for-1 rule is blown out of the water when I bring home goodies that I plan to sell in my Etsy shop (cshadwick.etsy.com) but I'm personally committed to only selling tiny items that are easy to store, easy to ship, and easily treasured.