I had a reader write this week and ask what a LOI, or letter of inquiry (also sometimes called a letter of introduction) is - and I realized that I've never written a post on the topic! So...
A letter of inquiry (LOI) (like the grant proposal or entire grant raising process) is an opportunity. Yes, you are applying for grants to raise money, first and foremost, but any and all submissions are read by someone. That person works for a foundation (or the government, a corporation, etc.) who donates grants. This means that all submissions (while not always funded) are always marketing tools. Each time someone...anyone (!) reads one of your proposals or a LOI - it is, at a minimum, a marketing opportunity; and at the best - it raises (or helps raise) a grant! If, for instance, you apply once to a foundation; and your first contact with the foundation is a LOI (which is standard practice); and they respond to your LOI submission by requesting a full proposal (or grant application) from your organization - they've read about your organization, understood your mission and proposed project/program/or item. Now, if they do not fund your proposal this time; you should ask them how you could step up the likelihood to receive a grant for the next time you apply; and then apply again (and when you can apply next is stated, usually, in the foundation's giving guidelines). The thing about having applied once, before, is that the next time they read about your organization; they will already know about it (but learn more, as this is the second time they're reading about it). Repeatedly placing your nonprofit in front of program managers at a foundation who (according to your prospecting research) is likely to give to your organization - works in your agency's favor! So, even the declined LOI or grant proposal isn't "all bad".
The Letter of Inquiry is the first step of the entire grant application process. The LOI is sent to the foundation you are applying to, before you send a full proposal, because some foundations would rath