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.
I can’t tell you how many truly awful letters I’ve had to read in my life. As a former administrative assistant, I was responsible for all the unsolicited submissions to a major New York museum. Artists and collectors all over the country (and abroad) wrote to have their work considered for display or acquisition, and to be honest the decision frequently rested more on the quality of their cover letter than on their work _ which, romantic dreams aside, rarely if ever sells itself.