A lot of the time parents will send in cupcakes. If they don't then I do large sugar cookies which we decorate. I do not go all out since I deal with infants and toddlers and do not want to steal the thunder from the parents. They should have the privelege of seeing their child's reaction to candles and gifts and such at home. I do a special card signed from their "Friends at Sharon's Home Daycare". I used to give gifts of my felt to the kids for second and up birthdays. Most first birthdays child has only been with me less than a month. I do give them the felt at Christmas and to cut costs had stopped doing birthday gifts. Something I have done is bought a toy for the daycare and then on the birthday day we bring it out to play with because it is a "special" day so we need to add a "special" toy to our playroom. Everyone is happy, I still have a tax deduction for the toy and the toy is still there come monday.