Praise be to Allah.
There is no difference of opinion among the fuqaha’ concerning the fact that it is prohibited for a person to sell his hair, because it is part of him, and he is honoured by Allah, but selling any part of his body exposes him to disrespect and humiliation.
It says in al-Mawsoo‘ah al-Fiqhiyyah (26/102):
The fuqaha’ are unanimously agreed that it is not permissible to benefit from human hair by selling it and using it, because the human being is honoured, as Allah, may He be glorified and exalted, says (interpretation of the meaning): “And We have certainly honored the children of Adam” [al-Isra’ 17:70].
Hence it is not permissible for any part of the human body to be treated with disrespect. End quote.
With regard to donating it to someone who will use it as a wig:
Using a wig may be permissible or it may be prohibited. It is permissible if it is done to correct the defect, and it is prohibited if it is done for the purpose of beautification and adornment.
Shaykh Muhammad ibn Saalih al-‘Uthaymeen (may Allah have mercy on him) said:
Wearing a wig is done in two cases:
The first case is when it is done for the purpose of beautification, when the woman has a full head of hair, which looks fine , and there is no defect that makes her look bad. In this case, wearing it is not permissible, because that is akin to adding hair extensions, and the Prophet (blessings and peace of Allah be upon him) cursed the woman who adds hair extensions and the woman who has that done.
The second case is when the woman has no hair at all, and she looks odd among other women, and it is not possible for her to hide this defect or conceal it except by wearing a wig. In this case, we hope that there is nothing wrong with her wearing it, because it is not worn for the sake of beautification; rather it is worn in order to correct the defect. But to be on the safe side, she should not wear it, and she should wear something to cover her head so as not to expose the defect. And Allah knows best. End quote.
Fataawa Noor ‘ala ad-Darb.
He (may Allah have mercy on him) also said:
Wigs are haraam and come under the same heading as hair extensions; even though wigs are not actually hair extensions, they give the impression that the woman’s hair is longer than it really is, so they are akin to hair extensions. The Prophet (blessings and peace of Allah be upon him) cursed the woman who does hair extensions and the one who has that done. But if there is no hair on the woman’s head at all, or she is bald, then there is nothing wrong with using a wig to cover that defect, because removing defects is permissible. Hence the Prophet (blessings and peace of Allah be upon him) gave permission to the one whose nose had been cut off in battle to use a nose made of gold. End quote.
Majmoo‘ Fataawa ash-Shaykh al-‘Uthaymeen (11/answer to question no. 68).
Based on that, if the organisations that are seeking donations of hair to make wigs for those who have sustained burns or have lost their hair due to cancer, or for other reasons, are trustworthy organisations, then it is permissible to donate hair to them, and the donor may seek reward for that with his Lord, may He be exalted.
But if the organisations are not trustworthy, or they will use the hair to make wigs for the purpose of beautification, it is not permissible to donate hair to them.
And Allah knows best.