When should I use a plain chat versus setting up a Claude Project?

Projects are useful when you want to silo a specific initiative with its own context so it doesn't bleed into other conversations — for example, creating a project for a specific fundraise with all related sub-conversations underneath it. For project instructions, you can ask Claude itself to draft them: describe what you're trying to do and ask it to generate the instructions, then copy those into the project's instructions field. One participant does something similar with a dedicated prompt generator. A downside noted with projects is that it can feel like "teaching a new baby a skill again" — repeating context Claude should already know about you — which raised the question of whether Claude Code with CLAUDE.md files (a project-level file plus an overall file) would be a better way to house that persistent context, similar to how desktop folders are used to store standing project information.