I concur with my colleagues. An exchange with or transfer to another institution builds a great deal of good will. Perhaps leading to collaboration in collections care that can benefit both collections. We have also transferred a number of duplicate objects and out-of-mission items to the Education collections. We put a lot of thought into it before it is accomplished but does help to get duplicates out of the artifact collection storage areas and enhance programming.
Also, remember other non-profit institutions that aren’t museums in your area. Theater groups, nature centers and other learning institutions might be able to utilize deaccessioned objects in their programs.
Good luck, deaccessioning time each year makes me sad but is a neccessary part of maintaining a healthy collection.