The important parts of an LOI

After spending a week reading proposals and letters of inquiry, I thought it might be a good time to offer a refresher course on a properly designed letter of inquiry, sometimes also called letters of introduction.

A letter of inquiry (LOI) is basically a way of introducing your organization to a prospective funding partner and requesting their monetary support. LOIs are meant to elicit an invitation to submit a fully fleshed out proposal, not as the final funding request.

It should be formatted as a formal business letter, with attention to proper business formatting and language. It should contain the date, inside address and the appropriate salutation. Closing signatures should be properly formatted as well. If you aren't sure of the formatting there are innumerable examples online.

The tone should be respectful and business-friendly, even if you know someone at the prospective funder's office quite well. This is the place for "Dear Sir" not "Hey, dude".

If it is done in hard copy, letterhead stationery is recommended for the first page and corresponding paper with a footer showing your address and name for subsequent pages.

As to length, if there are no guidelines offered by the funder, two pages is a good rule of thumb. By no means should it exceed three pages. Some funding organizations are now limiting LOI's to a certain page, word or character count.  Always try to check the requirements with your target organization either via their online profile or by actually contacting someone at their offices for guidance.

Introduction

A modified Executive Summary.

Who are you and what do you want?   Since this may well be the only part that is ever read, it is important. If you were referred to the funder by someone, this is a good place to mention it, as follows:

"Joe Black indicated to us that you are accepting letters of inquiry" or words to that effect.  Just mention the person briefly. 

Introduce your agency. Include a short thumbnail version of your organizational biography (1-2 paragraphs); a short but complete outline of your mission goals; a statement of mission alignment (seeks to show grantor that you recognize their priorities and shows why you think your request for funding fits within their mission).

The amount you are requesting (unless funder guidelines prohibit this).

Your qualifications to accomplish your mission (previous successes, advantageous partnerships, community involvement etc) 

Statement of Need

Briefly outlines the problem you are seeking to solve, the impact the problem is having on your target population and why your program is needed (no one else is addressing it or other agencies are overwhelmed, etc).

Program specifics

Present the macro details of your program.  Be sure to include specific outcome goals that prove impact, and mention how you will verify outcome data. Briefly introduce key program staff and synopsize their qualifications relative to the program. Include a total projected figure for the program, but this is not the place for a line item budget.

Other support (if any)

List any other funding sources or pledges of support including dollar amounts (If your other funders agree.  Otherwise, use percentages, such as "XYZ  has pledged to underwrite 20% of the program costs for the first year).  Remember that no funder wants to be the sole source of support for your organization and your programs.

If matching funds are required, mention where and how you plan to obtain those funds.

Closing.

Thank the funder for the opportunity to present your organization/programs to them and restate the ask. Sample closing:

"Thank you for the opportunity to present our organization and our mission to (name of funder).  We are looking forward to an invitation to present a full proposal further explaining our request for $35,000 for the (name of program)"

The LOI is your only chance to make a first impression.  Do your best to make it a good one. 

Sell solutions, not problems

For those of you who believe that marketing your nonprofit mission is all about explaining a problem…

Wise up!

Donors at all levels want solutions that solve the problem, not perpetuate it. For new or smaller nonprofits, establishing that you have the resources to do that is one of your biggest hurdles.

That's not to say that you shouldn't include the high points of the problem as a explanation for your solution. After all, there has to be a reason to ask for other people's money, whether you are selling a car or a cause.

That's what the statement of need is for, but if your whole pitch is about telling people what they probably already know, you're going to lose their interest quickly.

Unless your mission is very unique or seldom addressed, donor education on the problem is sometimes regarded as just so much more PR hype. More importantly, it wastes valuable space in your proposal.

For local nonprofits, much or your funding is going to come initially from your local area; usually at  the city, county or sometimes state level. 

A case in point

To  combat a stray dog problem,  county commissioners passed an ordinance requiring all dogs be spayed or neutered to receive a license, or that the owners get a $350 annual kennel license for unaltered animals.

As often happens when governments get involved, the policy had unintended consequences. The population of unlicensed and freely breeding dogs skyrocketed.

A local but small  mid-South animal rescue had been trying to build a no-kill shelter for almost five years, with little success. They had four acres of donated land, but little else. The cheapest plans they could put together were still coming in at $2.7 million dollars for construction and all the corresponding preparation costs, including an environmental impact study.

The problem wasn't so much irresponsible pet owners as it was the cost of the surgery. Even at the so-called county discounted average price of $175.00 per animal, most owners in the economically distressed county just couldn't afford it.

The rescue wanted to switch tactics. They contacted every vet in the area and asked them if they could offer  spay and neuter services for $75.00 per head in return for guaranteed payment. 87% of them agreed.

The new mission of the rescue was to collect funds to offer prepaid vouchers to the owners to give to the veterinarians. The owner would contact the rescue, receive a voucher number, take that to the vet within 30 days of issuance, the vet would turn in monthly confirmation of the surgeries  to the rescue, and they would then pay the vets. They will call the campaign "More pets, less puppies"

At present, there are still some logistics to be worked out, such as what to do with animals that have no owners, but initial response to the concept has been outstanding. Pledges have tripled in just a few months.

Why this works

County residents already knew about the problem. They wanted it fixed, but not at the expense of maintaining another shelter forever and ever.

This idea offers a real solution to animal overpopulation. It short, people can see the time when the need for the program will dwindle down to a minimum level.

Results are germane to the county residents. No one wants to have their dog impounded and destroyed, but economics is still the driver of family budget decisions. People who are tired of packs of free roaming dogs can see an end in sight.

Veterinarians, some of whom  had been doing some surgeries for free as a public service, will realize more income, most of which goes back into the community in the form of wages and local purchases.

 

Even the county benefits, since their animal control personnel can spend more time on abuse cases instead of rounding up whole packs and litters of dogs. What little extra revenue was coming from dog licenses will be more than covered by a reduction in county personnel costs for overtime.

Focusing on impact

Rethink your approach to your mission. See if your programs can be redesigned to offer real solutions to the root cause of the problem. Give donors a glimpse of the light at the end of the tunnel, instead of just a longer tunnel.

Understanding donor objectives

Followers of this blog know that I am all about matching the most closely aligned mission objectives when researching possible grant or donor profiles.

How can you do that if the grantor or donor profiles aren't specific?

Anyone who has ever used resources such as the Foundation Center database is familiar with the categories or fields of interest filters. Youth, education, human services etc. are a good place to start. but they are overly broad.

To drill down to specifics, try these things:

·         Go to the grantor's website, and look beyond the obvious.  Who are they supporting, and just as important, who is supporting them? Research those people or entities too.

·         Don't overlook the obvious. Check out their grant application requirements and note the exclusions.

·         Do a general search for mentions of the prospect on the 'net.

·         Research the board members. Their particular interests and passions may drive the grantor agency's policies.

·         The same holds true for the grantor's largest partners or donors.

·         When possible, connect with them before you ask for money. Go to an event they sponsor, or attend functions where board members are likely to be present and listen to them speak about their interests.

·         If you get the chance for one-on-one contact, even just a brief introduction, be prepared.  Perfect your 30-second elevator speech and have business cards available.

Yes, all of this is time-consuming. In fact, grantor research is the single most often-requested service I offer.

Still, why would you spend two hours each writing ten grant proposals that have no chance of being funded, when the same time could be spent on one or two qualified prospects that you may have an 80% or greater chance of landing?

Work smarter, not harder!