Good idea but make sure it's a competition for the clearest writing, not just the most beautiful.
It doesn't have to be long. The famous typist's sentence would do: it contains every letter in the alphabet...
The little green fox jumps quickly over the lazy dog.
You should give it to them printed or typed on a piece of paper. You are testing their handwriting. If you write it on the board they have something to copy. If you dictate it to them you are no longer just testing their handwriting.