You could casually mention to your friend that you’re thinking of donating the dress to one of these organisations that specifically helps those needing wedding attire.
So your dress could find a new purpose, helping someone else create their special memories and at the same time for a good cause.
While you may have issues with it – it’s important to remember that the dress served its purpose on your friend’s special day.
I am sure your friend will understand and support you in your choice of ways to find a new purpose for the dress.
Some charities collect formal dresses for people getting married quickly due to a terminal illness and do not have the budget to buy everything new in such a short timescale – for example, the Wedding Wishing Well Foundation.