Talk to your kids and let them pick a charity that means something to them...If they love animals, maybe a local animal rescue league or shelter.
If the horrifying images from the Horn of Africa have moved them maybe they could raise money for water or famine relief.
Local homelessness, shelters for abused women, victims of fires or floods, there is no end to the list of places struggling and needing help.
Use 3 labeled boxes to sort things.Sort through their toys, books, outgrown clothes etc. Most of us have far more than we truly need. This is an opportunity to talk with kids about the difference between need and want. Make a box labeled "No Good" for broken or ruined items. Label another box "Sell/Give Away" for items they are willing to give away and that still have life in them. Here is my secret box: Label the 3rd box: "Probation" or "Wait List." This is the box for things they haven't used in ages, but "I was just thinking of using that!" Don't argue with them that you've heard that before, or that no they won't. Just put the item on probation... The deal is that if they use the item more than twice in the next month it moves out of the box and into a regular place. If not, it gets given away at the end of the month. Through out the first box quickly.
Use the sell/give boxes from each child for the yard sale. Divide into cheap boxes of similar prices and individually priced items. If you don't have enough invited other kids to join in on the project. Make posters to draw attention to the different categories of items. Agree that ALL things left at the sale's end go directly to Goodwill or Salvation Army.
For a really great set of guidelines and hints for actually holding the yard sale check out this website. They have good ideas and some particular hints on making a kids' yard sale a success.
Image credits: thriftyfun.com