Is a Grant LOI Right for Your Organization?

Andy Kessenich

The grant LOI (Letter of Inquiry/Interest/Intent) stage in a process should be utilized to screen applicants so you can make an informed decision early on regarding those not likely to make the cut or to funnel applicants to a different funding opportunity that’s a better fit. Using systems of discernment helps to ensure only grantseekers with the best chance of receiving funding will submit the full set of requirements. In the end, you're saving the applicant and your organization time, money, and frustration. If you have a high volume of applicants, think of all the organizations who never see a dime after all their hard work going through the full proposal steps. Wouldn’t it be kinder to cut some of them loose before they invest so much effort?

Grant LOIs are only effective if they:

Are built to be shorter than your full proposal/application. A streamlined and fairly brief application form should indicate that an LOI may not be necessary.
Do a good job of asking essential questions of the applicant in a way that can help you screen out unqualified applicants.
Don’t add additional time and administrative work to your staff’s workload. Is the LOI going to be easy to manage?

Before building a grant LOI, consider splitting some of the questions on your full application into a few categories:

Deal Breaker Questions: 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 geographical locations need not apply at all. These basic parameters should be described clearly in your guidelines upfront, or in an eligibility quiz, but you may include them on your LOI as well.
Essential Questions: 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 Questions: There may be other information 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 should be part of the full application, not your LOI. This might include questions about staff capacity, timeline, evidence of prior impact, partnerships, or sustainability. Note: 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.
Keep On File Questions: 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 have voiced concerns that introducing an LOI will invite a deluge of random and ill-fitting proposals. Most nonprofits don’t apply willy-nilly for grants they are entirely unqualified to receive. To discourage an unreasonably high increase, be sure you have very clear guidelines or establish an eligibility quiz to filter out some of the least promising requests before they even submit an LOI.
(Looking for a way to communicate successful LOI usage to your grantees? Check out this blog post on Writing the Letter of Inquiry and share it with your grantees.)