Cut up the plastic cards with scissors so you have four strips slightly narrower than the sewing spool. Bend one end of each strip so it conforms to the curve of the spool.
Attach the bent portions to the spool with glue so the four strips form a cross with the blades sticking out.
Glue two nuts to a block of wood, positioning them about 5 inches apart. One of the nuts should be right against the edge.
Put glue around the end of a pencil and insert it through the center of the spool. Let the glue dry. Then insert the pencil part of the pencil/spool/blades assembly through the nuts on the block. Glue one end of your string to the middle of the pencil.
Super-glue the side of the wood block assembly to the edge of the rain gutter so the blades dip down into the gutter. Let the glue dry.
Go to a nearby swimming pool and attach the garden hose to a water faucet. Place your second small wood block under one end of the rain gutter, and the other end of the rain gutter in the pool at a slight angle.
Attach the other end of the string to another pencil and place it as far away from the assembly as you can. Place the end of your hose at the high end of the rain gutter and turn on the water. The children will now see the waterwheel turn under the force of the rushing water. As a result, the string will wrap itself around the pencil and do the work of reeling in the other pencil.