My grandfather was in the U.S. Army and was stationed in Berlin after right after the fall in WWII. He brought home several spoils of war and one was left to me. It's a nazi red cross sawback dagger. I was always a WWII buff because of my grandpa and dad loved war movies. I grew up playing Medal of Honor and Call of duty so I knew what the Nazis were. My interest in WWII led me to major in history in college and to go back for a masters as well. I really want to get rid of this thing, and I'm trying to figure out the best place to reach out to find out what to do with it.
It's appropriate to not want the thing around as a decorative object. But it is an historical artifact. First choice would be gifting it to your grandfather's home town museum or historical society. They could use it, if they wanted to do an exhibit on the town's role in the War. You'd want to discuss it with them. If you made the gift unrestricted, they might document the gift and make photos for their records but might not display it. They also could trade it or sell it to get something more desirable for their collection, in the future.