The first stage in many grant applications is an LOI. LOI can stand for Letter of intent (LOI), Letter of interest (LOI), or Letter of Inquiry (LOI). Confused? You are not alone. This article will discuss the differences and similarities between each, and at the end, we link to a sample template you can use.
An LOI is usually a 1 to the 3-page grant request. It provides a high-level summary of the organization requesting funds, a brief description of the grant request, and how the project aligns with the Grantmaker’s interest and past giving. An LOI may be the only grant application a funder requires to make a funding decision. Or it may be the first step in a multi-step grant application process.
What is a grant LOI?
Used interchangeably, a Letter of Intent, a Letter of Interest, and a Letter of Inquiry have different purposes and requirements:
Letter of Intent/ Letter of Interest: You may submit these types of LOI in response to a Grantmakers calls for applications or to an open application on the funder’s websites. This LOI is commonly available to uninvited applicants, meaning any organization that fits the eligibility criteria can apply. The letter of intent/interest introduces the funder to your funding idea. They may use this information to determine if they would like to invite you to submit a more detailed application. Funders like LOIs because they take less time for the applicant to complete and less time for them to read. An LOI is supposed to limit the burden of fundraising on both sides. An LOI can also help the Grantmaker gauge how many applications they need to review and plan their staffing accordingly.
Letter of Inquiry: This type of LOI is uninvited and unprompted. It can be used to contact a grantmaker without a defined or publically available application process. In this case, you can send a letter of Inquiry to introduce the organization without a specific request amount. The goal is to intrigue the funder and get them to follow up. Follow-up might include the funder requesting a meeting with your organization. It might consist of them declining your Inquiry. It might include them connecting your organization to another funder. Or it might consist of them sending you information on their application process (invited application). Regardless of the outcome, because they are not expecting your LOI, you will often need to follow up in a few weeks or months before you get an answer.
What is the format of an LOI?
An LOI may be in an application format, so you may have a form to fill out or a series of questions to answer. Most often, an LOI is a letter. You will want to place it on your company’s letterhead and add a date and a recipient. The recipient may be the Grantmaker’s Board Chair, Executive Director, or a listed Point of Contact. When in doubt, check their website. Suppose the funder does not have a website. In that case you may consider sending the letter to the person listed as the signatory on their publicly available 990 (nonprofit/foundation tax return) and mailing it to the address listed on the 990.
What to include in an LOI?
I like to include the same five standard sections of a grant proposal with fewer details. The five commonly used topics to cover are 1. Organization History and Background; 2. Problems Addressed; 3. Project Activities and Purpose; 4. Results and Evaluation; and 5. Budget. You can read our article “How to write a grant proposal for a nonprofit” for all the details.
How to write a grant LOI?
The writing style you use for an LOI will depend on the funder. For LOIs to government funders, you may choose a more formal writing style. When writing to a foundation, I like to use a friendly tone of voice.
Regardless of the funder, LOIs should be informative and engaging and invite the funder to learn more. However, because an LOI is short, it can be challenging to include all the information you feel is essential to share. For this reason, it is beneficial to spend some time before you start writing, researching the funder and narrowing the focus of your grant request to one or two easy-to-understand discussion points.
I also like to use the “Inverted Triangle” style of writing. With an Inverted Triangle, you put the essential information at the beginning and the least important information at the end. For example, the first paragraph will summarize who the organization is, who they serve, and what the project is about in a couple of sentences. The body of the triangle is for the details about the problems faced and solutions proposed. Finally, the end of the triangle is a summary, a call to action, and contact information.
As you can see, a grant LOI is a timesaving way for a Grantmaker to make funding decisions. And they provide some flexibility for the applicant. But there are still rules to follow. An LOI should be concise, informative, and engaging. Check out our article, Example Letter of Intent, for a sample LOI we created that you can use as a template. You may also want to check out Grantwatch’s article, How to Write a LOI = Letter of Interest or Intent for Grants, one resource we used during our research and found very helpful.
