Google the phrase "donations of old cell phones" and you will come up with pages of organizations that accept old cell phones and repurpose them to be used again. Here are just a few:
Cell Phones For Soldiers - This organization actually sells the cellphones they collect to ReCellular, and they use the money they make to buy pre-paid phone cards for American soldiers. The organization was started by by teenagers Robbie and Brittany Bergquist, and they have donated over 500,000 pre-paid cards to date.
Phones for Life - This organization distributes free emergency cell phones to those over 60 years old, victims of domestic violence, and those with serious physical disabilities.
Support Network for Battered Women - Reprogrammed cell phones help victims of domestic violence call police when needed.
This is the option I'll be going with for the devil phone. It would be cruel to saddle someone else with a phone that doesn't want to call out when you want it to. Especially someone who would be using it in an emergency.
Old cell phones, like most electronics, are considered e-waste and should never be put in the trash to end up in a landfill. Most municipalities have e-waste recycling programs or you can go to Earth911 to find the closest place that will accept your old cell phone for recycling.
One last thing
I read over at MSN money that "A user needs to perform "an advanced hard reset," which is typically outlined in the phone's user manual, to permanently clear the memory."
If you can't find your manual, you can go to Wireless Recycling, and give them the manufacturer and model of your old cell phone along with your e-mail address. They will then e-mail you the instructions to safely erase all personal data from your phone.