I'm a one man show too.
When my personal T-shirts are no longer presentable, I might wear them around the house or to bed.
When they get beyond the pale, I tear them up for shop rags.
Previous employers T-shirts are treated pretty much the same way they treated me. I'll do the same as I do for my personal shirts if the treated me fairly.
(With one cheap "the check's in the mail" employer I gave my remaining shirts to a charity group that distributed them on Skid Row in Los Angeles about 15 years ago.)
