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I've found that my Mom is still able to use scissors. So we are making a rag quilt. This is where each square is quilted seperately. I marked the squares and she cut on the lines. Then I marked the batting and backings and we followed the same process. After 25 squares a day or so, she was ready for a little nap, so I was careful not to leave out too many for her. I will have to do the sewing, but she has been able to put the 'layers' together and pin them for me. Look for a project that uses the same steps over and over - and only give one step at a time. Sometimes she thought she was back on the farm, cutting out patches for everyone's barn clothes. This brought back memories when she was younger.
What I did with my mom was to get her a big but low basket (low so that she can see into it and it's not dark inside) and fill it with silk/plastic flowers; then a few containers (baskets, tins, etc) with a block of oasis or styrofoam in them and ask her to fix us a bunch of arrangements that I need in a couple of weeks for PTO luncheon, book club party, etc. - I would remind her about it every few days too. This could easily keep her busy off & on for 2 - 4 weeks, she will arrange and then rearrange. The flowers and tins you can get for cheap at Goodwill stores and those you can take apart for her to use. Or go to Michael's sale bin for things. If you think she would like this, get 2 big baskets going: 1 that she is actively working with and the other for the next project. Once she's "finished" you bring them home and disassemble so they can go out again. Or actually place them in your house and bring her a picture of them being used and that will make her happy and feel useful.
When she was in IL, my mom even did styrofoam base wreathes for her door and for her friends doors.These were hysterical. One of the ladies who really had a bad dementia day wore hers as a hat to lunch. As I said, hysterical.
For general ideas for arts & crafts, go to BSA cub scout site. There are lots of ideas there. I've found there is alot of similarities in abilities and concentration level of 7 & 8 yr old boys and elderly with dementia. Good luck and have fun!