Upcycle : use it as gifts, incorporate it in other things – decorations, embellishments, wrapping paper, book covers, gorgeous book pages, picture/photo mounts etc. Take a look at what the delightful Sarah Jane has done with some of her kids paintings here.
Re-cycle : in the recycle bin to go back to nature, or to be used at home as table protectors, to have additional artwork drawings or embellishments added to it to further enhance it and extend the creative flow.
Kids are seldom attached to the outcome, the process of creating is the joy they take. So take a photo of them holding their art work, ask them to tell you the story of the art and write it in a photo journal and then let it go.
There will always be a few favourites and of course they are the keepers. But most of the works can be repurposed – take a photo, scan the item if possible or desired, and don’t get too bogged down in clutter.