You could create an item called GRANT or whatever you would like.  Receipt it into inventory with negative cost, assign it as a resource. and then expense it to the contract under that project with material usage.  As far as your GL structure goes those are decisions to make on your end.  

Why not record it as estimated Revenue?

Hey Wendy.  This is related to a detailed investigation you and I did last year into revenue recognition behaviour.  The user has to recognise a manually entered % of estimated costs.  Essentially the outcome was that introducing revenue changes the behaviour of PJC revenue recognition such that it won't work.  The user therefore sets up all jobs as internal (no customer) so revenue isn't invited to the party.