These can be interchangeable to some extent, but Letters of Intent are more common requested from federal grants for existing grants, and Letters of Inquiry are more common for Private Foundations on (sometimes) an open, rolling basis.
The other differences between Letters of Intent and Letters of Inquiry are the intention of why the funding source is requesting either one.
For example, Federal grants will often have a Letter of Intent as a requirement to an existing grant application or ‘strongly urge’ you to submit a Letter of Intent, a few weeks before the final grant application is due.
Why? Well, there are several reasons.
To see if your project even meets the priorities of their grant program. Your project may not be invited to even apply for the final grant application if the funding source does not see your project as a good fit. Before you get all huffy, puffy if they aren’t going to fund your project you would rather find out after a one-page letter of intent rather than writing a full grant proposal.
Another reason is that the funding source wants to have a better idea of how many grant reviewers to recruit and logistical set-ups for the grant reviewing process. Sometimes funding sources treat a Letter of Intent kind of like an R.S.V.P.
For your nonprofit’s purposes, the Letter of Intent will set you up to be on the mailing list to get direct contact from the funding sources in case there are any amendments or updates to the grant.
How to Write a Letter of Intent
Disclaimer: Always refer to the funding source. The following description is a general description when you have no additional requirements or required framework. Always read the funding opportunity announcement or specific requirements for the Letter of Intent.
Your Letter of Intent should not be a full-length novel or even an e-book. It should be one to three pages that is very succinct.
Put the Letter of Intent on your nonprofit’s letterhead and include a date, a point of contact (actually a person’s name!) and title, and the address, with a salutation. To whom it may concern should never be written. If you are writing a Letter of Intent for a federal grant, then go to the federal agencies website and find out who is the head of the agency and address it to that person.
Have an attention-grabbing hook for your first sentence and then get right into it. State the name of your nonprofit, the type of your nonprofit status, and when you were incorporated.
Next, articulate how your nonprofit’s project meets the priorities of the agency or funding source. Make sure your project that you are requesting funding for actually does meet their priorities.
Include a brief statement on what you are requesting money for, the total amount, any other funding source, and the duration of time when the money will be spent. Include who or what you are serving and the geographic region.
The Need! Now get into the need and include statistics, survey information, and/or testimonies showing the need for your project.
Moving on, write about the objectives: what you are specifically doing, how it will be measured, how it will be achieved, how it is relevant to your needs, and the specific timeline. This can, and should, be written in one sentence for each objective.
Next, write the activities that need to be completed for each objective. Who will do each activity, what is the activity, and when will it be completed. A tip is to use a graph or chart for the objectives and activities/timeline if you have space.
Next, describe the budget. You already wrote how much you needed for the project, now break it down. If you asked for $40,000 for personnel, explain how this is broken down. Is it four staff at $10,000 each or one staff? Tip: Use a chart for this.
Finally, write down why your nonprofit is awesomesauce to carry this out. If you have received a million dollars in grants already, write that down. If you have an amazing CPA that has provided grant management on multiple grants include that. If you are new but have received $40,000 in fundraising events, then include that. Show that you can manage money and run projects.
Review any requirements included by the funding source. If the requirement is one-page you are going to have to cut out some details from the above language. But still, keep the framework! These are the important items and don’t need a lot of explanation.
If it is a one-page requirement, but you know your project rocks and you want to include 15 pages of testimonials and 50 pictures, you may get rejected because you didn’t follow directions. Above everything, cut the flowery language and follow directions!
For further examples of each of these tips, refer to the podcast episode 058 on the Letter of Inquiry. Some of these descriptions to cross over in the writing part, but as first stated the Letter of Intent and Letter of Inquiry can be directed towards different funding sources.