When I was a kid I would have hoped that if I wanted to do something (something that kept me out of trouble, kept me active, taught me responsibility and about teamwork) and my parents couldn't afford it, I would hope that instead of them saying they couldn't afford it they would say we can't afford it entirely but you can work for it and we'll help you in the process.
I think part of the breakdown in what your asking, for me, is the fact that you say more than once that you cannot afford the activity. Then you ask about fundraising. Your children are too young to work and contribute significantly to something that you cannot afford so I read into it that you must be thinking of fundraising since you also asked if it was tacky.
I think using the word fundraiser is what people are having issues with. I don't think you mean it the way it sounds.
I would second picking up cans. You can make it their job to crush those cans. It wont give you a fortune but it is definitely work they can do at their ages. You could also have them ask neighbors and relatives to save their cans for them. I think people would be happy to help in this way. It would take some commitment for the kids to follow up and pick up what people save for them.
I think can collecting, lemonade stands, and yard sales are more what I would suggest if someone asked me how to insure that a kid has "skin in the game" (something I don't generally subscribe to especially for elementary kids trying out extra curriculars.) None of them are going to take a costly on going expense from out of the budget to affordable.
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