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Cover letters are normally brief, just one page to introduce the applicant and summarize the attached proposal. A warning – some foundations separate the cover letter and attachments from the proposal itself during the application review process. Never make the mistake of stating the requested grant amount or some crucial project detail exclusively in the cover letter. Do not worry if some sentences from the full proposal are repeated exactly in the cover letter. 

The first paragraph traditionally indicates why the project is a good match for the funder's guidelines and refer to any relationship with the funder (Did you meet with a program officer? Do you know a board member? Did you hear a foundation representative speak at a conference?). If applying to a company, you can indicate how many employees volunteer for your organization or if an executive serves on your board of directors. 
The second paragraph should give a summary of the project and the "ask amount," suitable for the program officer to use in internal documents that list all pending proposals. 
The third paragraph might note your organization's enthusiasm for the project and describe how other funding can be leveraged for this gift. If appropriate based on your funder research, offer to host a site visit or provide additional information or call the funder in two weeks to check the proposal's status. Indicate the contact person for the proposal, who might be different from the Executive Director or Board President who signs the letter. 
Some writers include an emotional story in the cover letter, but I prefer an elegant style -- unless you know that a small family foundation appreciates a personal and dramatic appeal (the type of funder where the grand-kids made grant decisions after Thanksgiving dinner).
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