My kids and the kids I babysit love to make crafts. We often make ornaments, magnets and picture frames, but once in a while, my creativity just isn't there when they want it to be. On days like those, I hand over the craft supplies and let them go crazy.
When I was younger, oh who am I kidding, I STILL love to take an afternoon and just make something from whatever I've got on hand. I am one of those moms who never throws any of my scraps away. I have also been known to keep things like holiday cards, ribbons from invitations and salvageable pieces from broken items around the house. They come handy on days when the kids want to make something. All of this stuff goes into a box- okay several boxes and bags packed in a large plastic storage tote- for a rainy day.
Letting the kids make whatever they want with whatever you have is a great way to build their creativity and let their imaginations run wild. Our boxes contained things like: popsicle sticks, googly eyes, felt pieces, ribbon pieces, feathers, fuzzy stickers, wood scraps, plastic shredded gift bag filler, magnets, pompoms, string and yarn and fabric pieces. Some of the places I get the items in our boxes are yard sales, craft and discount/thrift stores, scraps from projects I've made and scraps from school projects.
Don't be intimidated if you aren't crafty. Kids love to be turned loose on a table full of regular household items (clothespins, fabric from old clothing, toothpicks, thread, yarn from an old sweater, faux flowers, paper plates and chopsticks to name a few) that they can twist and glue into critters and cars. I have to admit that I had started some housework while the kids were busy, but I jumped in with the kids when I saw all the fun they were having. Crafting doesn't have to have a particular structure for it to be fun and productive.