At its simpleist, it isn't a breach of GDPR. - Public sector emails are fully subordinate to an FOI request, you must assume everything you write can / may end up on the front page of your local paper. [ Disclosure, part of my day-job is GDPR - and stopping businesses from claiming 'GDPR!!', every time they refuse to do something ]
Ideally, should the Clerk have re-written the email, yes. But similarly, there should be grants application policy / application form on your website that the Clerk could have directed the Club to.
Protecting the Clerk, however, in the absence of a policy to award grants, it should really be for councillors (not the Clerk) to respond to constituents about the possibility of a grant being awarded, as otherwise the Clerk is developing a political decision (whether or not to entertain the possibility of a grant). The Clerk can say "we don't have a policy for this", but it is for councillors to say "we'd look at it at the next meeting".