A little background:
The gift was set up to support a program through which a student leadership group makes grants to organizations requesting financial support to implement innovative fundraising ideas and programs. All disbursements from the fund must be based on an approved proposal.
Generally, you do not report grants on 1099-MISC. Some grants are non-taxable; others might be taxable to the recipient but the obligation to report these is with the recipient.
A scholarship or grant in a situation in which an individual recipient (i.e., a student) provides services to the university as a condition of the scholarship or grant would be reportable on a W-2.
In the case you describe, it is unclear to us whom the “entity” (recipient) is, and exactly what and for whom they are using the grant money. Do the fund-raising ideas redound to the student leadership? In other words, is the idea that the recipient entity generates innovative fund-raising concepts which the student leadership or university will then employ? If so, that appears to be provision of services by the recipient benefitting the student leadership or university, in which case the payment would not qualify as a “grant” but rather payment for services, and therefore be reportable on a 1099-MISC.