Preparation note: make sure decorators have eaten a snack beforehand, or soon you will have no more clay for modeling!
One box of powdered sugar
1/3 cup light corn syrup
1/3 cup of butter
1/2 teaspoon salt
1 tsp Peppermint extract (experiment with other flavors, almond, lemon, vanilla, but this one is delicious.)
Wilton paste food colors or any other intense food colors
Mix all ingedients but the coloring. Divide into small bowls, perhaps five: primary colors, plus white, plus green. Dough gets stickier as you work with it, but hardens a bit when refrigerated. Put out small amounts of colors, first, to get tiny decorations vs. baseball sized creations. We started with snowmen and Christmas trees, then moved on to playground equipment and landscapes.
So, let them decorate cake themselves! I baked one layer of chocolate cake, plus one set of chocolate cupcakes, and provided a sifter full of powdered sugar "snow." The birthday girl was thrilled with a settle-down project at the end of the day, and she made candle holders for her seven birthday candles-- miniature wreaths with holly berries.