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.
There is a tendency to think that the often arbitrary rules of letter writing don’t really matter, that as long as your recipient can work out what you’re saying, that’s good enough. This shows a great deal of disrespect for your recipient, though, and for your own ideas. It suggests that a) your reader’s time isn’t valuable enough for you to write clearly and efficiently, and b) that you don’t particularly care about the content of your letter.