For my son's 6th birthday we had a tie dye party.  Each kid was given a tee shirt ( you can usually get them on sale at Kmart or Walmart). We wrote each child's initials on the tag of their shirts with a magic marker.  We had different stations set up around the yard, each with a different container of water mixed with Rit dye. We also had a large card table set up with rubber bands so the kids could tie their shirts up.  The kids then went from station to station adding color to their shirts. To make it easier for young children we used squirt bottles that they could fill with dye and squirt on the shirts.  We also had a clothesline and hangers set up so that the kids could hang up their shirts to dry. This is pretty messy so it is definitely an outdoor project.  Be sure to write on invitations that children should wear old clothes.  Great for a summer birthday!