Do you do applique?
Here's my idea: Take the girls to the fabric shop and have them each choose a FQ and a co-ordinating colour of embroidery floss.
Choose backing fabric from your stash.
Have the girls names, plus a few standard shapes (flowers, butterflies, etc.) printed up ahead of time so that they can easily make templates to cut out their designs from their FQ, and then use fusible web to applique their names / designs onto the backing fabric.
Teach them how to add blanket stitch or some other basic stitch around their designs with the embroidery floss, if they want to, or have them sew beads or other embellishments on with the floss.
Hem the edges and put a hanging rod at the top so they can hang their name banners.
Jan