Hi Angela, we've found that instant yeast (and even active dry yeast) generally dissolves and activates well when added in with the flour, but there are some circumstances where incorporating the yeast this way can be more challenging (particularly in recipes that call for using cooler water, or when making sweet doughs). In these cases, activating the yeast in a little lukewarm water (subtracted from the total liquid content) or making a sponge, as you describe, can certainly be helpful. In any case we always recommend doing what works best for you, and it won't harm anything to add a sponge step to your bread recipes if that's what you prefer to do. 

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