In the UK I think commercial recordings and books are already covered by the British Library Collections but I'm not sure how comprehensive their archiving is.

When Sid Long died, his record collection was donated to the Folk Music Degree library at Newcastle University. It depends how distinctive your (one's) collection is. The Keith Summers collection was taken over by Fred McCormick but that was a particularly important collection.

As Pat suggests, it might be nice to have 'clearing house' where stuff might be recycled to like minded people.