Join Crystal over at http://www.biblicalwomanhoodonline.com/blog.htm for some great frugal tips. I had my own daycare in home for several years and then worked in a couple centers and I was always trying to come up with easy and cheap things for a classroom of kids to do. These are a couple favorites and seemed to be enjoyed by from toddlers all the way up to age 12.
1. Kool aid painting
spray bottle with water
assorted colored drink mixes(koolaid or any similar brand)
newspaper or magazine
Place newspaper down on flat surface(stops any bleed through). Place your white paper down on top. If using several different types of koolaid, separate them in bowls(doesn't take a whole lot per child) Let your child(or assist) in sprinkling the koolaid in different patterns on the paper. Be careful not to bump(can tape down newspaper and white paper). Once finish, lightly spray the paper with water until the colors start to magically appear. Leave laying flat to dry. Once dry it will have a fruity scent. Hang your creation in your favorite display area.
2. Shaving cream painting(this activity works better for the 3+ crowd)
shaving cream(white foamy ones work the best)
plastic place mat
Start with a clean, dry surface. Take some shaving cream and thinly spread it out on the surface(this is a good activity to use a plastic place mat to avoid staining) Once the shaving is spread out to the same amount of surface as the paper, start dropping food color on it. Use the toothpick to make designs. Once finish, take the paper and place it on top of the design. Place a book on top of the paper to use as a press. Gently press the book down. You can check sporadically to see if the design is transferring to the paper. When finished, gently lift the paper up. Lay the paper someplace flat to dry. Just a note, if you make the shaving cream real thick, most of the color will flake off when its dry. You might have to do a little trial and error to see what works best.
Shaving cream is great for toddlers, preschoolers and even school age children to play with. Squirt a bit on a table and let them rub it, squish it in their fingers and draw and write in it. Moms, join in too! It's fun!
Another note, shaving cream is great at removing crayon and marker marks off tables. Let your kids play with some on a table that's marked up. If they miss any, just squirt some on there yourself, rub it in and let set for a few minutes. It should clean it off! No need for the expensive magic erasers!