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How is it used? What does it do?

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Here's a good definition according to brewingtechniquies.com:

Lauter grant:

When using a pump to move wort from the lauter tun to the kettle, it is easy to pull liquid from the tun faster than the grain bed wants it to flow, compacting the bed and causing a stuck runoff. Aside from being a large pain, a stuck runoff can also damage the pump (magnetically coupled pumps can be damaged if run dry).

One solution to this problem is to purchase a speed controller for your pump, but these are expensive. Another option is to install a ball valve on the outlet side of a centrifugal pump to restrict flow, but ball valves can be difficult to use for fine-tuning liquid flow. A lauter grant represents another possibility.

A lauter grant is simply a vessel that collects the wort from the lauter tun. The pump is plumbed directly to the lauter grant instead of the lauter tun. Gravity gently pulls the wort from the lauter tun, thus minimizing compression of the grain bed. A float switch can be used to turn the pump on when the grant is full, thus freeing the brewer to tend to other things.

My lauter grant is an old plastic bottling bucket (see photo on page 45). A hose runs from the lauter tun to the bottom of the grant (to avoid aeration of the wort) and a pump is attached to tubing that leaves the grant through the spigot. This simple arrangement eliminates the need for an expensive pump speed controller.

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