'Sustainable' party favors and gifts: Look at the problem another way
I was a little surprised that the first several answers were rather unoriginal but sweet ideas: have guests bring used toys or books to exchange; involve children in making something to take home (soap was the rather ambitious suggestion); or painted terra-cotta pots with little plants. Finally someone offered timidly, "you could go without the favors!"
Exactly. How is setting a cultural standard of buying rather useless items for other children to take home from a party you are throwing sustainable? Even if these items are good for the earth, or creative or lovingly-made, they still involve expense and work. Shouldn't a party simply be about celebration, not about things?
In my opinion, sustainability should be, not just about the environmental impact of something, but also the financial and societal impact. If everyone in a society stops offering favors and purchasing forgettable doodads for birthdays and holidays, it would stop being an expectation. Instead of buying a gift for friends' birthdays, my children make cards or help me sew stuffed things. For parties we host, I offer homemade cupcakes and delicious food and my hospitality and never offer favors. While I can't say I save a lot of money -- it's not that favors and goody bags are expensive -- I imagine that the impact of my decision is to quietly spread my Better Way.
Sometimes doing nothing at all is the most sustainable choice of all.