S.W.
We used to make "candy neclaces" Using fruit loops andthe long licorice strings. This is a perfect eye-hand coordination craft too!! Though 2 year olds may need some help!
Depending on your theme, the kids can make masks using paper plates. You can cut out designs and have the kids use paint (outside would not make big for clean up, and if they are in swim suits, even better! Just hose them off!)
Some type of treasure hunt. You can get little trinkets, bubbles, stickers or tatoos, rings, little gagets or something to hide around your yard. The kids can decorate their "treasure chest" and go find treasure.
Also, a neat cake idea is to make "dirt cake" using chocolate cake and pudding, put candy worms coming out of it. You can serve it in little tera cota pots ($ at the dollar store or Hobby Lobby)
The internet has a bunch of cool ideas depending on the theme you are having.
Have fun!
I love summer parties!!