In "found poetry" the writer takes words from a source that was not quite poetry to begin with...in regards to form. Recipes, news stories, discarded love letters...almost anything at all. (I'm going to try a variation soon by having students fish out an old writing assignment from their archival book bags. We'll cut it apart to make not-so-magnetic poetry.)
For example, Hart Seely has created an entire book called Pieces of Intelligence: The Existential Poetry of Donald H. Rumsfeld. Mr. R. falls under the category of "I'm a poet, but I didn't know it." Seely took Mr. R's words and arranged them to look like poems. If you don't believe me, look it up on Amazon.
Here's an exercise that William and Mary's amazing Emily Pease introduced to the 2009 Eastern Virginia Writing Project fellows: found poetry using the Yellow Pages. This is another inexpensive teaching tool.
Clip out ads from the Yellow Pages. Have them laminated, if you plan to use them with children/teens. If you have a document camera, project one on the screen for some whole-class practice before turning the writers loose on their own.
What do they do? I'm wide open when it comes to this exercise. They may write a poem inspired by the topic. They may rearrange the words of the ad to make a poem with or without adding other words. Poets may try to write a limerick, a haiku, a rhyming couplet, an acrostic, an ode, etc. based on the ad's subject.
This is also another assignment that necessitates a little whine time from the class. Of course, it ends up being one of their favorite activities. The phone book is an endless supply of writing ideas...and it's free!