I don't know what you meant by "keeping Lists in Project".

I'd say it's still good to keep the List<Reward> in Project. In MVC, you need something to hold the data retrieved from the database, so you might as well use the List<Reward> to do that.

Generally speaking, the best class design is the one that models the real-world object the closest. For example, if you say "a project has a number of rewards", then you should have a List<Reward> in your Project class. With that said, without using an ORM library, the best class design is likely to make programming more difficult when you store data in a relational database. So for this assignment, as long as you don't break MVC (i.e. access database in controller then pass the data to view), you can choose whichever way you think is easier to program.