I'm a long-time volunteer at a charity shop that does most of its business in clothes.
(1) Please donate clean clothes. They don't have to be newly dry-cleaned and dropped off in the plastic sleeves! But you're not doing a charity a favor when you drop off smelly, dirty, or filthy clothes. What's most helpful is if, after you take something from the dryer or the clothesline, you decide to put it in your give-away box rather than putting it in your closet.
When something filthy is donated, it can quickly and easily contaminate your entire donation, and the donations of several other people -- for instance, if the shop gathers many donations' worth of clothes and bags them up for processing in another area of the store.
(2) A thrift store that knows what it's doing will squeeze every last penny from its clothing donations by selling the unsaleable clothes as "weight." But, no, not all thrift stores do it, for whatever reason. Not sure what your local shop does with clothes that are too worn-out to resell? No luck looking at the website? Please call. If the staff doesn't know (they're often short-term volunteers in a high-turnover industry), then ask for the manager. If the manager says they don't sell the worn-out old clothes for weight, then ask the manager if they know of another shop that can take that stuff.
(3) In general, if you have a question about what a shop will take, call them up and ask. Or, when you drop stuff off, show them your scruffy stuff and ask if they'll be able to use it, or if they'll just toss it in their dumpster. Believe me, the shop has had donations that are in far, far worse shape than yours (unrepairable shoes, doggie sweaters that smell like doggie poop, pots and pans with food left on them). If you hear that your scruffy stuff will be thrown away, then it's up to you to decide whether you'll let them toss it, or if you'll try another shop, or if you'll put it back in your basement.
(4) How one shop works: At the shop where I volunteer, we do an immediate triage when donations arrive. All clothes go into big garbage bags for sorting at the warehouse across the street. Stinky, gross clothes are thrown away before they would ever go into one of these bags and contaminate the rest. Housewares and other non-clothing items are given a visual inspection. If they're gross, they're thrown away. If the shop would not be able to sell them, but someone might find it useful (biggest example here is paperback romance novels), they go into the "free" bins at the front door. The rest is taken to the back, sorted, priced, and then moved to the floor.
(5) As for repairing clothes with thrift-store grab-bags, that's a function of how much time you have, how much skill you have, how much you're willing to teach yourself, how much you're willing to put up with repairs (or "hacks," like fixing a button on your overalls with paperclip wire), and how totally tightwad frugal you are. Example: a new zipper is probably more expensive than a 50-cent thrift-store item with a zipper in the color and size you need. Zippers can be tricky to replace. Like any skill, you get better at it the more you do it. But in any event it's a determination that you have to make on your own.
