I found a weird thing growing under my daphne. It is three inches
across (about the size of my fist), it is hard on the outside and has
brown powder (spores?) on the top.

Emily,

It looks like a puff-ball fungus. That's a relative of a mushroom, but more
or less spherical, and when it matures, the interior is filled with spores,
which are spread far and wide when you go over it with a mower. The
unusually wet weather is encouraging the growth of more shrooms and fungi of
all kinds.

It isn't toxic, but I wouldn't recommend inhaling the spores!

laurie (Mother Mastiff)