I've started putting together my own craft kits in Ziploc bags for my kids to grab when they have some free time. I've also put the craft kits in cute gift bags or containers as gifts. Of course, Michael's and JoAnn's have great craft supplies, but I've also found a ton of stuff at Big Lots and our local Dollar Store. 

Picture frames are always a fun craft, and fun to give, too. A few weeks ago, I saw wooden 4" x 6" frames at our Dollar Store -- two for a dollar. I put a few of those together with some paintbrushes from Big Lots ($2 for a dozen), a set of three glitter glues from the Dollar Store and some paints from Ikea. I bought the paints a while ago, and I think they ran about $2 for six. 

Another favorite of mine is marble magnets. The Dollar Store carries a bag of about thirty large glass flat-backed stones. They also have a three-pack of craft glue that dries clear. The kids like to cut little pictures out of magazines and glue them to the backs of the glass stones. Then they glue magnets to the back. I bought a bunch of button magnets on eBay, but sometimes the kids cut up the free magnets companies send us to advertise their services, and I really support their creative reuse. I keep a bag of those magnets with our craft supplies. Also, I print out pictures of the kids on my home printer that they like to use on the backs of the glass stones. Those make for a great present for grandparents, and Christmas is just around the corner ....