The thugs forced their way into the Parkhead Community Nursery in Glasgow's East End by smashing windows, before breaking into locked cupboards with a hammer.
The cash, which had been collected by parents, and three iPads were taken.
Head of the Crail Street nursery Nicola Black said staff and parents were left shocked and upset.
But thanks to kind hearted local people, funds were raised to replace the stolen cash and the party went ahead as normal yesterday.
Police are now investigating the theft and have urged witnesses to contact them.
Nicola told the Evening Times: "We discovered on Wednesday that the nursery was broken into and we were heartbroken.
"The money had been raised by parents by selling Christmas show tickets, crafts and treats to give the children a really nice Christmas party.
Nicola and her staff decided that the Christmas show, scheduled to take place on Wednesday, would have to go on and they set about clearing up broken glass from the smashed windows.
Thankfully the festive party, organised for Friday, also went ahead.
The nursery head added: "We will not be defeated by these people and we had to go ahead with our plans for the sake of the children.
"I told the parents about what had happened after the show on Wednesday and they were devastated that someone would steal from the children.
"But the reaction from the community in the aftermath has been overwhelming."
Local groups and businesses have flocked to support the nursery to provide treats and help replace the stolen cash including Santander, Glasgow Taxis, Quarriers, Trans-pennine Express, Asda Parkhead, SMK Photography, Capital FM and the Celtic FC Foundation, who donated £500.
Nicola added: "The Parkhead and Shettleston area often gets a bad name.
"We are a deprived area and don't have a lot of funding, but our families go over and above to support the children."
Councillor Stephen Curran, executive member for education and young people, said: "This is a despicable act and the culprits should be ashamed of themselves, especially at this time of year."
A spokeswoman from Police Scotland said: "Inquires are on-going to trace those responsible.
"Anyone with information is urged to contact police on 101."