Nobody liked your project idea, so we are not going to give you any funding. The first version is a weaker statement, emphasizing facts not directly relevant to its point. The second version provides the information in a simple and direct manner. But you don’t need to be an expert on style to know that the first phrasing is diplomatic and respectful (even though it’s less concise) as compared with the second version, which is unnecessarily harsh and likely to provoke a negative reaction.
For instance, in a typical job application, the problem is that the company or organization needs a position filled, and more importantly they need someone who can do the job well and help the organization achieve its mission (which may be more profits, or it may be to save children in Darfur or to end global warming or to cure cancer). You arouse their interest by telling them that you’re the right person for the position and by promising to help them achieve their mission.