Donating it is good--small libraries often need computers.
You could use it as a DVD player.
You could also get an old mbox or something like that and use it as a recording platform.
These are by no means obsolete. I still use 15 older 20" iMacs - the ones with the intel processor & white plastic case - for video editing with Final Cut Pro as well as Photoshop etc at my high school as part of a digital video making program.