I buy those plaster-like ornaments at Hobby Lobby and let my girls paint them. I write the girls' names on the back with the date, spray them with acrylic sealer, and let the girls wrap them. The grandparents LOVE this. I love that it's easy, inexpensive, and the girls love doing it.
I also give the girls a piece of "nice" watercolor paper and some paint. Let them paint whatever they want. Get a $5 frame with a 5x7 mat in it and frame the painting. It usually looks like "modern art" and is a great gift. I write the girls' names on the bottom of the mat with the date. It's great to see how their painting styles change over the years.
Another idea...I let my 5 y/o daughter use my point-and-shoot digital camera to take photos all the time. She loves doing it and she can't hurt the camera. I'm thinking of enlarging a few of the photos to put in frames with mats and give those as gifts too.
For younger children....give them a bunch of pony beads (easily found at WalMart or Hobby Lobby), bells, macaroni, or whatever has a hole big enough for them to easily string onto, and let them make "necklaces" for their grandmothers, sister, etc. I usually get yarn or cording and a PLASTIC needle with a large eye to make the stringing easier. You can also dip the end of the yarn in hot wax from a candle to make the end stiff for easier stringing. I have one of those necklaces hanging from my rear view mirror right now. The beads are colorful and come in a bizillion colors and even some shapes. Lots of fun for little ones.
You can get very inexpensive mugs with paper inserts at Hobby Lobby for, like, $.88 each. Let them color the inserts and put them in the mugs. You could glue one of their school pictures on it. Anyway, these make great gifts like pencil holders or mugs for decoration. You can wash them, but you have to slip the insert out because the seal isn't waterproof. It's not dishwasher safe either, of course. But it wins for use of creativity and inexpensiveness.
Another idea....Get some of the paper that you use to make iron-on transfers. Have them color a picture then copy it onto the paper (I think places like Kinkos and Staples will even do this for you.), and iron it on a t-shirt, apron, tote bag, etc. You can get the apron and tote bag blanks at Hobby Lobby--or other places I'm sure.
Hobby Lobby (and other craft stores) have leather projects that boys would enjoy doing.
No, I don't work for Hobby Lobby....but I do spend a lot of time (and money) there!
Ceramics are easy for older kids to do. (I'd say kids as young as 4 or 5 could do it also.) Some ceramic stores have pieces what have the cleaning and first firing already finished. All you'd have to do is paint (or glaze) the pieces and have them fired again. I'll sometimes get a bisque piece (it's been fired once, changing it from a dried clay to a harder, less delicate, piece) and let the girls paint them with acrylics and just spray them with sealer. If it's a gift that will be useful and not just decorative, use a glaze from the ceramic shop. You could do something easy like little ornaments, or something bigger and useable like a cookie jar or a light.
In that same vein, some cities have places where you can go and make your ceramic pieces right there. They fire them and you go pick them up a few days later--finished! The nice thing about this is that you don't have to buy bottles of glaze that you will only use once or twice. You use the stuff at the store, and leave the mess there!
I'm full of ideas, but it's going on 6:00 in the morning and I have to get to bed!
Best of luck with this project. It sounds like lots of fun to me!
Blessings--
Dana
