I do this with some of mine
Just put it in a suet feeder and set it out as nesting material. I've tried other ways of putting it out, onion bags work well, but I didn't care for a braid made from old plastic bags. Held onto water and made the yarn yucky after a rain. Drainage is important. So it cutting the yarn into pieces 4 -6 inches long so that it won't tangle up around any wild life. I tend to cut closer to 4 inches, though some is already shorter than that when I start. There's not usually much left over after weaving in and trimming.
However much I enjoy seeing yarn in nests, there are only so many birds and they never use all of the yarn so I don't need 2 dozen feeders full of yarn in my bushes. That leaves more yarn that I could just toss - I guess. ......Probably not. Like most crafters I have a pack rat personality . Some people knit these glorious tiny tiny little creatures - like these
That is never going to be me. They are amazing though. Google tiny knitted or do a Pinterest search for the same - some wonderful creations out there.
So what do I do with little bits of yarn? Mostly I save it for stuffing. Things like dog or cat toys where the quality of the stuffing isn't as important as with people toys or pillows. I have also used it for packing material. Now I'm curious - What do you use your yarn scraps for?