The community from Rosedale Primary School and Shortheath Junior School in Willenhall decided to hold the fete because of the ongoing medical treatment six-year-old Harvey Hack needs.
Since his birth Harvey, a pupil at Rosedale Primary, has been in hospital many times and has undergone four operations.
He will require ongoing medical treatment and eventually could need dialysis and a kidney transplant.
Harvey was delighted to hear that classmates planned to raise funds for the hospital and enjoyed taking part in the fete activities.
Mother-of-three Amy Hack, aged 27, said: "The tube from his bladder did not form properly during pregnancy and he has been in hospital numerous times.
"It has been a long and emotional rollercoaster and it is wonderful that the two schools joined together to hold the fete.
"They are hoping to raise £1,000 through Harvey's JustGiving page and when asked he said he would like the money to go to the ward at Birmingham Children's Hospital.
"Harvey had his first operation when he was only 12 days old and a second to repeat that procedure.
"Last December he had a catheter fitted and a month ago had an operation to remove his appendix.
"Because he has only one functioning kidney there will come a time when he might need dialysis and a kidney transplant.
"The school has been so supportive throughout the whole process and Harvey has been really excited about the fete.
"It has been the light at the end of the tunnel for him."
The fete was organised by mother-of-two Ellen Knowles, aged 38, and Natalie Smith, aged 35, both from Willenhall.
Ellen's twin daughters Ava and Eve Battles, aged eight, are in the same year as Riley Hack, Harvey's older brotber,
Natalie's eight-year-old daughter, Freya, is also in the same year group.
Ellen said: "We held a sign language session at the school where pupils learned how to sign the song Lean On Me.
"We wanted to give the children something to celebrate as their sports days and other events were cancelled because of the Covid-19 pandemic.
"Everyone wanted to give something back to the hospital that had helped Harvey and this seemed the ideal thing to do and hopefully we will raise £1,000 for the ward."