I stumbled across this site today - http://www.crazycrayons.com/ And all I can say is WOW! I knew that someone probably did this somewhere, but never was sure of where, ya know?
And they are sooo cheap too! I think this would make for a great birthday present for a kid. Make sure and check them out - the prices are on the how to order page.
I'd love to be able to save up our little pieces and broken crayons to send in, but we don't have too many of those here. We had one of those little crayola machines that melted down the crayons so you can make "new" ones for two years and never used it once! Our kids will usually color with a crayon till it's almost gone then throw it into the crayon tub. The crayon tub is a tub that is about the size of a plastic pencil box but 3 high. It holds ALOT of crayons.
We purge it about once a year, so I guess we could donate then. They would be some sad looking crayons, but hey, they got recycled - right? And we're really into recycle, reuse, repurpose =)
Sadly as the older ones get older, we don't seem to use as many crayons as we used to =(