We have helped with some color parties at a few schools where they set up a small route around a track, parking lot, or grassy area for the kids and only used about a 1/4 lb per person. It all depends on how many times you're planning on letting them run the route, how many people are throwing the color at each station, and how generously are they throwing it.
Here's a link to a video that might be helpful. You can skip ahead to 2:09 to see a color station and how they toss it at the runners)-http://www.youtube.com/watch?v=mBV0gBSvXT4. There's also a video on the home page of www.colormechattanooga.org of a mini run we did for the children and adults with disabilities at Signal Centers.