A simple option is to use a segment in the GL to track the grant's expenses vs income.

Yes, we have suggested that.  Unfortunately they would like something a little bit more robust.  That may be the only option though, as I haven't come across anything that would integrate.

The problem with using G/L is that the grant period usually isn't the same as the financial year so reporting on income and expenses from G/L becomes difficult (after a year-end).

We have used Project and Job costing for this in the past

Dingosoft - Have clients used your trust acctg software for this in the past?  It is one of the solutions we were possibly looking into.

Not sure - we have had a few not-for-profits using T/A, but I'm not sure exactly what they use it for. I guess it depends on exactly what they need. T/A will allow them to receive a grant into a trust account and then make payments out of that account. It will keep tight control of the money and it gets around the problem of year ends, but won't print an income and expense statement. I had a prospect once that was going to use an optional field to classify T/A payments into pseudo expense accounts and create a report based on those which sounds feasible. The problem I see with doing this though is it stuffs up the recipient organisations own accounting. A payment out of T/A only generates a G/L transaction of DR control Account Cr bank. I was actually thinking PJC might be an option.