Letting grant funder know that funds no longer needed? I am a English PhD student (focusing on literature), but this year one of my assistantships through my university has involved some grant writing for local non-profits. Recently I've been working on a small grant for a local non-profit, which will help this non-profit pay for some consultants to help it develop a strategic plan and more effective organization. (The grant is offered by a foundation that focuses on capacity-building support for non-profits in the city where I live.) Because of the impacts of COVID-19 on the non-profit sector (i.e., many of our organization's donation funds are likely to dry up), our hired consultants have generously offered to do their work pro bono. 

Here's my question: what is the etiquette of letting a grant funder know their funds are no longer needed for a specific project? To clarify, I was pretty far into the grant writing process (original LOI / project proposal approved, directed to the next steps in the application process) when we learned we'd no longer need the funds for the consultation fees. (The foundation that has offered the funds is a major donor to local non-profits, so there is a good chance that we'll be applying to them again in the future--just for a different project.) Since I corresponded a lot with a representative of the foundation, I feel like I should follow up to let them know, especially as we may be applying to them again in the future ... what are others' thoughts on this issue?

(If there's a better StackExchange community for posting this question, I apologize!)
I would ask the representative. Procedures differ wildly from funding agency to funding agency. 

However, I would not be worried: everybody acted in good faith, and you are asking for less money. So in all likelihood the response will just be a short email thanking you for letting them know, and telling you that they look forward to receiving new applications from you in the future.