From Mashable, a template from Alexandra Franzen:
Hey [name],
Thanks for your note. I’m so proud of you for ___—and I’m flattered that you’d like to bring my brain into the mix.
I need to say “no,” because ___.
But I would love to support you in a different way. [Offer an alternative form of support here]
Thank you for being such a wonderful ___. I am honored to be part of your world.
[A few closing words of encouragement, if you’d like]
Looks pretty effective compared to the seizure I translate into an email reply when I try to say “no” to requests for my time in the nicest way possible. Not sure I’m “proud” of everyone I’d send this too ;), but that’s easy enough to tweak. I’m glad I stumbled across this as a result of following Tim Ferriss!