This tip is not only eco-friendly, it's also budget-friendly and community-building.
A clothing swap, of course, lets you trade clothes with your friends (or with strangers, though I recommend sticking with friends).
There are two types of clothing swaps I've participated in. The first is a personal swap. I really like these, but it really depends on knowing the right people. In this scenario, you find friends with kids a year or two older or younger than your own (or both), and you swap boxes of clothes at a time. In my case, I have a good friend who has a 7 year old girl and a 4 year old boy, whereas I have a 7 year old boy and a 3 year old girl. I lend her my outgrown boy clothes, one size at a time, and she lends me her outgrown girl clothes, one size at a time. At the present time, she has my box of size 4's and also my box of size 5's, and I have her box of size 3T's. As our kids grow, we pack up the borrowed clothes and return them in exchange for the next size up. I haven't bought more than a handful of clothes for my daughter since she was born, so this situation has been ideal for us.
This would also work with a larger group, each person lending out their outgrown clothes to the person in the group who needs them. Also, you could clearly just give the outgrown clothes away entirely if you're done having children and don't want the old clothes back.
If you plan to set up this type of exchange, be aware that there is always some amount of loss - some of the clothes will get ruined or lost and not find their way back to you.
The second type of clothing swap is more like an informal garage sale, but without any money. Gather up your outgrown clothes (your own, your spouse's, your kids', whomever's) and invite your friends to do the same. Pick a date. On the day of the swap, designate various places around your house with size/gender signs. "Women's Small," "Women's Large," "Men's," "Kids 0-2," or whatever. Everyone who walks in lays their stuff down in the appropriate places, and then starts shopping. The goal is not an even exchange, it's to get rid of stuff you don't want any more and trade it for stuff you do want. The last clothing exchange I attended, one of the other ladies present took home some skirts that I brought, and I ended up taking home a few new casual shirts and a pair of post-maternity pants.
If you plan to host this type of exchange, be sure to have a plan for the unwanted clothes left over at the end of the day.
Contributed by Sarah from Boulevard Designs and Wallypop.