The Organized Knitting Club is all about organizing our knitting stuff...and I specifically concern myself with yarn. I'm a professional organizer, and the first thing clients and I usually do together is declutter. It's a rare client indeed who doesn't have extra stuff she's willing to part with to make life a little more organized.
So I challenge you to take a critical look at your stash. Do you have some balls of yarn that have been languishing? Do you ever pick up some yarn and put it right back down because you don't like the way it feels? Is there a color or two in there you just can't figure out what to do with? Perhaps you've started knitting with a certain yarn, then frogged it because you didn't like the way it knitted up. There's no reason you should keep this yarn. Lighten the load and donate it. (Incidentally, this is the same advice I give clients when it comes to clearing out their closets...if a garment doesn't make you feel fabulous, consider parting with it.) In an earlier post, I mentioned a worthy group, Interim House, who will gratefully accept your yarn donations.
Weeding out is one way to destash. Another is to make a commitment to using your stash, rather than buying new yarn. Personally, I think this is easier said than done (I get really excited by patterns sometimes), but it's a worthy endeavor. It helps your pocketbook, saves you space, helps you keep things neat and organized. For advice and encouragement on this journey, there are several Ravelry groups that can help (and I'm sure this is just a small sampling of what's out there):
Stash Knit Down 2008
Stash for Cash
Sock Stash Elimination Campaign
A third option is to swap yarn. If you have a yarn you no longer love (or perhaps never did), you might lucky enough to swap it for something you'd adore. It's a "one woman's trash is another woman's treasure" kind of thing. There are many swap groups on Ravelry. Just search the groups using the term "swap" and you'll see all the kinds of swaps available.
Flylady, the homespun guru of decluttering and creating habits, says "You can't organize clutter." If your stash is cluttered with yarn you'll never use, declutter it and then you can organize the stuff that deserves a place in your home.