My son is in third grade also, and while he never asked for reports, we gave him a few anyways. None too hard. Once, we had him decide what character from any book he ever read he would like to be and why.
He does the best on the ones he chooses himself. He is obsessed with Egypt, so he did one on mummies and one on the pyramids. We are thinking for next year we will get him to focus more on a more select subject in Egypt, such as a person, King Tut for example. His topics have been a bit broad lately so we think maybe we will have him focus on King Tut's life.
So I suggest having him help pick out a subject in which he is interested.