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Most children already get too many Christmas gifts - I'd rather share with some of my other single friends who don't get much. Every year, I try to think of something "special" and useful for my friends.
Some of my favorites:
A nice mug with some fancy hot chocolate mixes, along with a can of "Pirouette" cookies.
A headlight: led flash light on a head strap, inexpensive in the sporting goods department. My horsey friends who work and feed in the dark when they get home loved being "hands free", my non-horsey friends also like having light with both hands free for outside chores in the dark and car safety.
One especially frugal year - I printed up a 12-month calendar on card stock and wrapped it with a giant chocolate bar (the $3 kind on sale for a dollar).
There's also "double-duty" gifts - $200 tax deductible gift to a child's school designated specifically for the club or team they're involved with. Not only does the child get a "gift", they get something to share with their friends (one year it bought new uniform shirts for a friend's daughter's soccer team) and I get a tax credit.
Many museums, zoos, etc. have special memberships or clubs for children that include newsletters, special web sites, special "members only" events, etc. - that also offer a tax deduction for the giver.
Therapeutic riding centers - adopt a horse for a year in the recipient's name. The one I volunteer at provides a picture of the horse, a plaque on their stall with the adopter's name - and a tax deduction for the giver. Zoos and wild life parks are probably also feeling the pinch - I'd rather give a child a tiger or giraffe for a year than a toy or mindless video game. If they don't already have a "program", you could help them start one.
Have a Christmas (or birthday) party where everyone brings a gift - for a specific charity. Make sure you provide the gift givers' names and address to the charity when you deliver the gifts (if they're "large ticket") so they can send letters for tax purposes. When I did this for my last birthday, the average gift for the therapeutic riding center (lead ropes, halters, buckets, grooming equipment, etc.) was valued in the $25-$50 range. All the fun of opening presents and everyone benefits.
Lots of ways to make the holidays really special in tight times.