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Measuring the level of institutional capacity for grantsmanship within higher education informs administrators about the needs of their organization and where resources and institutional supports can be implemented to support faculty and staff. Receiving grant funding can lead to implementing cutting-edge programming and research support, which could improve the quality of education provided and, ultimately, student retention. While conducting an institutional capacity needs assessment is crucial for making data-informed decisions, there is a significant gap in institutional capacity research; specifically, there is no valid and reliable assessment tool designed to measure institutional capacity for grantsmanship. The present study aims to develop an assessment tool for higher education institutions to evaluate support systems and identify the needs of their faculty and administrators for grant writing efforts. The current study used a mixed-method approach over three phases to understand the indicators behind measuring institutional capacity for grantsmanship. We developed six reliable scales—promoting grant proposal writing, proposal writing (for faculty), proposal writing (for administrators), proposal writing (all respondents), submitting grant proposals, implementing grant activities, and managing awards. This study contributes to our understanding of institutional capacity and produced a reliable assessment tool to support grantsmanship.