Dignified Flag Retirement

When I was a kid in Boy Scouts, we held a ceremony or two as our school's flags needed to be replaced. You may check with them or the Girl Scouts.

Just donate it to the Boy sScouts and they can use it for a ceremony.

I've seen drop boxes for old flags at Stine's. Not sure who gets them after though.

Ceremony of Final Tribute:

Only one flag should be used in the ceremony, which is representative of all the flags to be burned in the service. The remainder of the flags collected should be incinerated. A corporate, government, or military incinerator or furnace can usually be found for this purpose.
The ceremony should be conducted out-of-doors, preferably in conjunction with a campfire program, and it should be very special.
The ceremony involves two color guards, one for the flag currently in use and a special color guard for the flag to be retired from service. Of course, this may be adapted if conditions necessitate.
Just before sunset the flag which has been flying all day is retired in the normal ceremonial procedure for that location or group.
The color guard responsible for the flag receiving the final tribute moves to front and center. The leader should present this color guard with the flag which has been selected for its final tribute and subsequent destruction. The leader should instruct the color guard to "hoist the colors."
Leader comments: (when the flag has been secured at the top of the pole)
"This flag has served its nation well and long. It has worn to a condition in which it should no longer be used to represent the nation."

"This flag represents all of the flags collected and being retired from service today. The honor we show here this evening for this one flag, we are showing for all of the flags, even those not physically here."

The leader should:

Call the group to attention;
Order a salute;
Lead the entire group in the Pledge of Allegiance to the Flag; and
Order the flag retired by the color guard.
Slowly and ceremoniously lower and then respectfully fold the flag in the customary triangle. Deliver the flag to the leader and then dismiss the group.
This concludes the Ceremony of Final Tribute
"Ceremonial Burning"

Fire Preparation:

It is important that the fire be sizable -- preferably having burnt down to a bed of red hot coals to avoid bits of the flag being carried off by a roaring fire -- yet be of sufficient intensity to ensure complete burning of the flag.

Flag Preparation:

The color guard assigned to the flag opens up it tri-corner fold and then refolds the flag in a coffin-shaped rectangle.

When all is ready:

Assemble around the fire. The leader calls the group to attention.
The color guard comes forward and places the flag on the fire.
All briskly salute.
After the salute, but while still at attention, the leader should conduct a respectful memorial service as the flag burns. National Flag Foundation recommends singing "God Bless America" followed by an inspiring message of the flag's meaning followed by the "Pledge of Allegiance" and then silence.
When the flag is basically consumed, those assembled, with the exception of the leader and the color guard, should be dismissed single file and depart in silence.
The leader and the color guard remain until the flag is completely consumed.
The fire should then be safely extinguished and the ashes buried.

good stuff hog daddy.

The reasoning of disassembling the flag though I have never heard of the cutting up of the stripes , more commonly is the separation of the Union (star field) from the stripes . Most merely remove the Union by cutting the field away. with the union gone you have a red and white striped cloth left and a white stared blue cloth neither being the US flag any longer . That is the purpose of flag disassembly .