Fill the piñata with lots of wrapped candy, small toys or prizes and (optional) confetti.  Avoid filling the piñata with chocolate or things that will melt on a hot day.   Hang the piñata from a tree or set up two ladders with a rope across them.  Use a broomstick that you have cut in half or buy a piñata stick at the party store for children to swat at the piñata.

Line the children up from youngest to oldest so that everyone gets a turn to hit the piñata before the sluggers break it open. 

Blindfold the player and turn them around three times and let them try and hit the piñata with the stick.  You can move the rope up and down to keep it away from the older kids and make it more challenging. 

A 10-second rule is a great way to keep things in order - tell the children that after the piñata is broken they must count to 10 and then go and collect candy.  This gives smaller children a fighting chance.  

Optional:  Before they begin hitting the piñata give each child a small bag to hold their candy and toys in.  This bag can be used as their goody bag to take home after the party.