If it turns out that your family must face this dilemma, however, honesty will be the best policy. You might tell your daughter that the simple process of deciding who is going to be admitted to a gifted program is not at all simple -- that a committee has to make a decision, and that the process is not always perfect. She needs to be reassured that people on these committees do the best they can and sometimes really excellent students cannot be accommodated. You could let her know that this does not mean that she is any less bright or valuable than her brother or than her friends who were invited into the program, only that the committee made other choices this year.
At the same time, she needs to be reminded of the talents she has displayed over the years. Be as specific as possible. Remind her of the time that she created an original gift for you or of the time she produced an unusual project for class. Talking with her about a range of talents -- not just those that are tested for the gifted program -- might allow her to see her entire array of strengths. For help with this, you might want to check the work of Howard Gardner and his associates concerning "multiple intelligences." He suggests many ways in which people can be smart and competent. His book, Multiple Intelligences: The Theory in Practice, provides some excellent strategies. Thomas Armstrong's book, Multiple Intelligences in the Classroom, has similar information that would be helpful to parents. Also, you might wish to look at some of the books from Free Spirit Press, especially The Gifted Kids' Survival Guide for Ages 10 & Under, which is written especially for children. Hope this helps!