Hi Rachel...I taught nutrition for a couple of years, and used this recipe a lot with kids:

Edible Playdough

1 part creamy peanut butter
1 part honey
2 parts (approximately) powdered milk

Mix peanut butter and honey (can be done individually in baggies or mixed up in one big batch, then divided). Work in dry milk until mixture is the consistancy of playdough. Kids can make creatures,sculptures, or roll and cut with cookie cutters, then decorate with coconut, mini chocolate chips, raisins, little pretzels...whatever you have.