I organize by color, plus I have separate boxes for Christmas, Novelty, Batiks, Other Holidays, Civil War, I Spy Charms, 5" Charms, 2-1/2" Candies, Pre-Cut Shapes (Dresden, Etc.), Projects in Progress, etc.
Generally I consider anything smaller than an F8 to be a "small scrap". I cut those into 5.5" squares, and then I cut as many 2-1/2" squares as I can out of whatever is left. Those are the two sizes I use most. Any leftover strips that are at least 1" wide go into a baggie, which I usually pass on to someone else (I don't have much patience with small pieces).
(Sounds great "on paper", but quite often I'm behind on keeping everything organized! LOL!
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It really just depends on the types of fabrics you have, the projects you do, and the size of scraps that you use most.
