I always enjoy seeing your work, Dave. I hope some kid appreciates how lucky they are to get one of these. I'm working on a kid's bow right now, a juniper-sinew, and I know it's going to hurt to give it away. Fortunately it's too short and light for me to shoot anyway, so that will help.
I think a whitewood or bamboo bow would be a better gift for a kid, just because white woods are so much more durable than juniper or yew.
A thought about decorating: I happen to know that many girls love Celtic knot work or elvish leafy stuff on the back of a bow. Earth-tone acrylic markers (search on Amazon) are a great way to apply such designs.
For the contest, I like the idea of giving kids a ticket for each bullseye they hit. Another idea: There's an archery range at a camp we teach at every summer. They just score each kid's best three shots. If you want to just award it based on potential skill, that might be a simple way to go.