A letter of inquiry, or LOI, is the short document a foundation asks for before it will accept a full proposal. It is usually two pages, it is read in a few minutes, and the only decision it produces is whether to invite you to apply. That makes it a different document from a proposal rather than a shorter one: a proposal argues a case in detail, an LOI answers a screening question, which is whether this organisation and this project are plausibly in scope for this funder at this size.
The five things an LOI has to establish
Who you are and that you are eligible. What the need is, in one paragraph, with a figure that is not rhetorical. What you propose to do about it, concretely enough that a programme officer can picture it. How much you are asking for and over what period. And why this funder specifically, which is the sentence most letters skip and the one that separates a targeted request from a mail-out. Everything else can wait for the proposal.
Length, and the discipline it forces
Two pages is the common limit and it is a gift. It stops you explaining your history, and it forces the need, the response and the ask into the first half of the first page where a programme officer will actually read them. If you cannot state the project in a paragraph, the LOI is telling you the project is not defined yet, and no amount of proposal writing later will fix that.
Why this funder, and how to answer it honestly
Name what you found in their published priorities, their recent grants or their annual report, and connect it to what you are proposing. This is the part that requires research rather than writing, and it is why prospecting and the LOI are the same piece of work. A letter that could have been sent to thirty foundations reads exactly like a letter that was.
What happens next, and what to keep
An invitation, a decline, or silence. Keep all three against the funder record with the date and the programme, because the same programme opens again and a declined LOI is the most useful starting point you will have next year: you know the format, the officer and roughly where the bar sat.
Questions people ask about letter of inquiry
How long should a letter of inquiry be?
Two pages unless the funder says otherwise, and the funder usually says otherwise in the guidelines. Read them before writing; the limit is often one page.
Is an LOI the same as a concept note?
Close enough in practice. Some funders use concept note, some use pre-proposal, and a few mean something more structured; the guidelines settle it.
Should I include a budget in an LOI?
An amount and a period, yes. A line-item budget, only if asked; it usually is not, and volunteering one uses the space you needed for the need.