For our regular sugar, we buy 10-15 lb. bags of the organic sugar at Costco, and it's really cheap. My husband uses the organic sugar to make his sweet tea, so we always have it around.
This week for Little Lady's birthday, I had started my cupcake icing shortly before the party when it appeared I'd be short on powdered sugar again. I'd heard somewhere that you can grind up regular sugar to make powdered sugar, so I thought I'd give it a try using my coffee grinder. Here are the results!

It worked great! I pulsed the regular organic sugar in a coffee grinder for a minute or so, just until it looked the same as the powdered sugar I had from the store. I also sifted the powdered sugar into the bowl to make sure it was evenly cut.
I have seen other recipes on the internet saying you need to add cornstarch. This is very possibly true, so please be careful if you are making a more sensitive recipe (like souffle? fondant? I have no idea, I don't bake much).
I just know that for me, this works as a cost-saving way to stay organic without spending more. The bonus is that you don't have two bags/containers in your pantry. And the other bonus is...
delicious {organic} cupcake icing!