Unpacking the LOI

Dear Dr. Streamline,

My foundation has always had an open application process for our funding, involving a rigorous application that is often over 20 pages long. Over the years, we’ve received an average of 100  proposals each year, and we can only fund about 15 – 20% of what we receive. Reading all these proposals is overwhelming for staff, and we hate saying “no” to so many hard-working organizations.

My program assistant suggested we try a letter of inquiry – something he learned about at a workshop. Do you recommend a letter of inquiry, and if so, what are the characteristics of a good one?

Yours,

Tired of the Piles

 

Dear Tired,

You are asking a terrific question here. As readers of this blog know, Dr. Streamline is a big fan of staged application processes – systems of discernment that make sure that only grantseekers with the best chance of receiving funding submit the full set of requirements.  This saves everyone time, money, and heartache. In your case, think of the eighty organizations who never see a dime after all their hard work!  Wouldn’t it be great to cut some of them loose before they invest so much effort?

A letter of inquiry (LOI) or pre-application allows you to say “no” early in the process to applicants who aren’t likely to make the cut. But, letters of inquiry are only effective if they…

  1. Are shorter than the full application. If your application is already super-short, an LOI probably isn’t necessary.
  2. Successfully distinguish the promising from the not-promising applicants by asking a few critical questions.
  3. Save your staff time and energy by being easy to manage

As a first step, take a look at the questions you ask on your full application and divide questions into three categories:

  • Deal Breakers: If certain things make an organization decisively qualified or unqualified to be considered, you’ll want to know them right away. For example, if you only fund in a specific county, then applicants from other places need not apply at all. These basic parameters should be established in an eligibility quiz or other early filter – and should be described clearly in your guidelines.
  • Essential: Chances are, proposal reviewers hone in on a few pieces of influential information to inform decisions.  For example, you’d probably reject a proposal that wasn’t a good fit with your organization’s mission, or that didn’t demonstrate a strong understanding of the problem it addresses. If a question generates essential Go/No-Go information, it should be part of your LOI.
  • Nice to Know:  There may be other information that you look at to discern between the good and the great prospect, to validate your decision, to help you think through risk, or to raise red-flags to discuss with an otherwise promising applicant. These questions don’t need to be part of an LOI – they should be part of the full application. This might include questions about staff capacity, timeline, evidence of prior impact, partnerships, or sustainability.*
  • Need for the File: Some information you may never use to make decisions, but need to have on file anyway. This information can be collected during the full application process or even later – once you’ve decided to make a grant.

Some funders are concerned that introducing an LOI will invite a deluge of random and ill-fitting proposals. Most nonprofits don’t apply willy-nilly for grants that they are entirely unqualified to receive, but to discourage the extra-optimistic, be sure that you have very clear guidelines and an eligibility quiz to filter out some of the least promising requests before they even submit an LOI.

Best of luck to you as transition to using a Letter of Inquiry! Your applicants will thank you for it, ultimately, but they may require some time to adapt to the new process. And keep in mind that you’ll want to collect some data to track how the LOI is working for you!  Consider collecting data to answer these questions:

  • How long does the LOI take an applicant to complete?
  • How long does it take us to review an LOI?
  • How many LOIs did we receive in each round of grantmaking?
  • How many applicants advanced to the “full application” stage?
  • How many full applicants were funded?
  • What was the experience (internally and externally) of the new process?

Letter of Inquiry Examples: 

Here’s a handful of LOIs from organizations of various shapes and sizes.

  1. MacArthur Foundation
  2. Weingart Foundation
  3. McCormick Foundation
  4. Doris Duke Charitable Foundation
  5. Charles Stewart Mott Foundation
  6. Common LOI from the Washington Regional Association of Grantmakers
  7. Meyer Foundation
  8. Blue Shield of CA

 

*Yes, one funder’s “essential” may be another funder’s “nice to know.” What’s important is that you discern between the information that always tips the balance for you and the information that helps you make finer distinctions between potentially strong applicants.

Dr. Streamline

Dr. Streamline is also known as Jessica Bearman. She, along with her colleague Streamlining Surgeon Alice Cottingham, and a cohort of Streamlining Interns, are available to answer all of your streamlining questions. Together, they diagnose the good, the bad, and the mystifying, and prescribe cures for your streamlining woes.If you have a question about your own grantmaking process, or one that you’ve encountered, please write to Dr. Streamline at drstreamline@peakgrantmaking.org for a useful (and possibly entertaining) Rx.