We like this recipe for clay cookie ornaments from Feed Me I'm Yours by Vicki Lansky. The ornaments are white white white, which makes a good base for painting and they taste so salty and ick that the inedible part isn't hard to enforce.
Clay Cookie Ornaments
(Overnight Drying Method)
2 cups salt
2/3 cup water
1 cup (or more) cornstarch
1/2 cup cold water
Mix salt with 2/3 cup water and boil. Add cornstarch and remaining water. Stir. If mixture doesn't thicken, set back on stove. Sprinkle extra cornstarch on table and rolling pin. Roll out dough and cut with cookie cutters. Use a straw to make a hole at the top for hanging. Let dry. Use paint, glitter, and so on to decorate. These are not edible!
Picasso had his Blue Period. Ellie is having a Red Period. Last year's ornaments were mostly black, so eventually we may have a rainbow on the tree.