Construct or purchase a bird nesting house with 3/4-inch-thick wood walls. Ideal woods include cedar, redwood and touch exterior plywood (good grade). The overall size of the bird house will depend on what birds you plan on having. Sizes range greatly, as you can house anything from a small finch to an Osprey.
Place sticks, twigs, dead grass or hay, and pine needles near the bird housing nest in a location that the bird can reach, such as in a box on the grass of your lawn. Birds will naturally pick this material up and use it as insulation in their nests.
Place the following items in an open mesh bag: string or yarn, strips of cloth, dryer lint, cotton batting, dried grass or hay, feathers, straw, cattail fluff and cotton balls. So long as they can see them, birds will locate these materials and bring them to their nest for insulation.