Grantwriting is a term that was first widely used in the nonprofit community during the 1970s to describe the process of writing, thinking about and organizing a proposal for funding or financial support, typically from a governmental or foundation source. A grant is a unilateral transfer of funds from one tax-exempt source to another. In this important sense, a grant can be distinguished from a gift or donation, which is a similar unilateral transfer from a taxable to an exempt entity. The process of soliciting gifts or donations from taxable sources is most often referred to as fundraising. Using this distinction, for example, an award from an individual, family or corporation would be a donation or gift. The same award from an individual, family or corporate foundation would be a grant. (The distinction is an esoteric one that won't make sense to everyone because actual usage of terms like these by informed and knowledgeable users can be highly idiosyncratic or inconsistent.)
Although the term is still widely used, it is now generally recognized that it is not the process of actually writing the grant which is most important, but the associated processes of program planning (sometimes also termed strategic planning, establishing and mobilizing resource (sometimes termed social capital formation or networking) that are most important.
Grants are sometimes written in response to published or widely available specifications (or "guidelines"), sometimes known as RFP's (Requests for Proposals) issued by those foundations or government agencies intending to award or "fund" one or more grants. Other grants may be developed "cold" and submitted "out of the blue", usually when there is some reason for those developing and writing the grant to believe some type of approval is possible.
In the case of foundations in particular, grantwriting may involve a multi-stage process beginning with a letter of inquiry and progressing through an assortment of preliminary proposals, "final" proposals and renewal requests. Grant awards are often multi-year basis, but seldom for more than three or five years for a single grant. Organizations and institutions that routinely make grants (known generically as grantmakers) typically show a marked aversion for more than a small number of grant renewals, while the financial interest of grant recipients would almost always favor extended renewals. This has given rise to a certain amount of financial instability and "churning" in the nonprofit community which some people see as institutionally disruptive and threatening and others see as contributing to a need for enterprise and creativity.