Is it permissible to donate bank interest to Islamic institutions, and is the money recouped from taxes due to this donation considered permissible?

What you have come to believe regarding the prohibition of usurious interests and the obligation to dispose of them for charitable causes and public welfare is correct. This disposal and avoidance of unlawful money that does not enter into ownership is not considered a donation. It is permissible to obtain a receipt from the charitable institution to prove the disposal of these interests, in order to avoid unlawful taxes. This falls under the category of repelling injustice. However, if the taxes are in exchange for a service provided by the government, then it is not permissible to resort to stratagems to avoid paying them. Usurious interests do not settle an obligation due from you, and funds should not be left in usurious banks except out of necessity.