When to Use a Letter of Inquiry
It is becoming increasingly common for foundations to request a letter of inquiry (LOI) as the first step in the grant-seeking process. Sometimes, they just want a letter, other times they supply a format you should follow, which is similar to, but shorter than, a full proposal. The rationale behind LOIs is that the foundation really doesn't want you to go to the trouble of completing a long grant proposal if they know it is unlikely to be funded.
A letter of inquiry, unlike a letter of intent, should include a compelling summary of your program plans. Include potential links between your program and the goals of the funder, and, if you are writing the LOI in the form of a letter, request a discussion of the merits of the project.