A Letter of Inquiry (LoI) is a short expression of your project in letter format. It is often associated with the cover letter and they both have many similarities. However, a LoI is sent to a donor before a proposal, while a cover letter is always sent with a proposal.
A LoI is often sent to new donors as a soft ask if your program may be in line with what the donor is interested in funding. Many donors now actually prefer that funding requests be submitted first in letter format instead of a full proposal. The purpose of the LoI is not to ask for funding, but to open communication with a donor, schedule a meeting, or move from unsolicited to solicited for the full proposal. Because of this, the letter of inquiry should contain just enough information for the donor to understand what the project is and why they should be interested. LoIs tend to be 1-2 pages long.
What to Include?
Paragraph 1: Express your Interest
In the beginning, briefly introduce yourself and express your interest towards why you want to work with the donor organization. For this, you need to research them first. Read their website, follow them on social media, talk to someone from inside to learn the specifics. Now that you have the information, show your knowledge about the organization. Mention their major activities and objectives. Talk about the projects they have funded before. And of course, do not forget to add a line of appreciation for their efforts and accomplishments.
Paragraph 2: State the 3 P’s
In this paragraph explain the 3P’s: Problem, Position, and Possibilities.
Problem (aka Need Statement): Describe the scope and magnitude of the problem to understand and diagnose the need for the project. Always state the problem with evidence, that is, facts and data to support your argument.
Position: Talk about the urgency to address the problem now. You should answer these two questions:
- Why is it crucial to address the problem identified now?
- What has already been done to solve the problem? Why is it lacking?
Possibilities: Here briefly outline the potential solution your project has designed. Propose your idea and why it is the best solution to the problem. Also, give a glimpse of why your solution is better than solutions pitched by other NGOs. (But beware not to defame other organizations!)
Paragraph 3: Project Introduction
The 3rd paragraph is almost like an executive summary of a proposal. In this section, you should highlight the important aspects of the project-beneficiaries, approach, benefits, activities and its impact. It is best to shape these aspects of the project based on donor priorities. Make it brief. You do not give full details in a LoI. Just give a taste of what you could achieve together as partners.
Paragraph 4: Evaluation Plan
Even it is just a letter of inquiry, donors will want to know if monitoring and evaluation is a part of your project plan. Kingpin a succinct paragraph guarantying donors that their money will be accounted for. Furthermore, describe how progress will be evaluated throughout and at the end of the project.
Paragraph 5: Organisational Profile
In this paragraph, you give an assurance of all the information you have provided in paragraph 1 to 5. Restate the objective of the project. Say what you want to happen next- request meeting for an interview and when you plan to follow up. Finally, do not forget to thank the reader for their time and consideration.
In the signature section, the letter-writer should include full name and contact information.