That is sad that the daughter just decided she didn't want him anymore...I can't imagine thinking that way
I think you are doing the right thing. You're right...he could get placed in the wrong hands. I would have way too many dogs if I had a big back yard. If he has seperation anxiety, do you think he will become attached to you and then have to go to another home?.....or do you think you will keep him? Either way...he'll at least be with people who will love him forever and take good care of him.