Well, I am not sure about turning it to the police just because I do not view the police as a responsible entity which could return the money. I for one have never gone to the police when I lost anything and so I would not think to turn anything in to the police either. Taking it and donating it could work welll if the owner cannot be found.
I did see a man drop a money-clip once and I told him about it as he was getting in his car to drive away. I thought about that for a long time because the money-clip was pretty fat ... it wasn't mine though and I don;t like taking things which are not mine unless I have permission to do so.
Money comes and money goes. Karma is karma though.