Kids that age like those 'rock crystals' that you grow...that could be a craft one day and something cool to look at for many days to come
Buy the cheap ceramic/plaster or plastic stained glass items (ready-to-paint) and paints to go with them
Sprout seeds in a cool-whip container with wet cotton
Those swirly colored, foul smelling 'plastic' balloons that you blow up with the tiny straws are cool
Make your own board games or trivia games
Teach them basic hand sewing (like how to sew on a button, etc...I taught my siblings when we were young!)
Make greeting cards (Thank You cards for teachers/parents, birthday cards...whatever)
Before school starts back make mini scrapbooks or journals and add pictures or drawings of your summer together
Have a 'day spa' with mini mani/pedicures, facials, hair and make up tips...take lots of pictures for your scrapbooks
Learn Origami together
Decorate some dollar store sandals with fun fur or strips of old fabric just to kick around the house in.
Get language audio tapes from the Library and learn an 'exotic' foreign language (French, German, Italian for example) Even if they just learn a phrase or two they'll feel SO sophisticated...or spend the day just pretending to talk to each other in a foreign language.
Make Kool Aid play dough. (Google the recipe) It's easy, inexpensive and smells good...let them pick the colors and call it modeling clay...'play dough is for little kids!'
Do plastic canvas cross stitch...great for beginners and cheap
Learn some Sign Language...it always comes in handy...especially at school!
Make paper beads out of sale papers...see website http://www.tappi.org/paperu/art_class/paperBeads.htm
(other crafts on this page, too!)
Make Kool Aid Popsicles out of an ice cube tray with toothpicks or the 'real' popcycle molds
The list goes on...there ARE a lot of free craft sites out there...do a web search.