Grace Hoadley Dodge was born on May 21, 1856 in New York City into a wealthy family with a strong tradition of philanthropic and evangelical activity. She was the oldest of six children born to Sarah Hoadley and William Earl Dodge, Jr. Dodge received most of her education at home from private tutors, but spent two years at Miss Sarah Porter's School in Connecticut (1872-74).

On her return to New York City, she began teaching Sunday School at the Madison Square Chapel and later in industrial schools for the Children's Aid Society. Dodge's interactions with the evangelist Dwight L. Moody, who stayed with the Dodge's during his 1876 campaign in New York City, had a profound effect on Grace's decision to dedicate her life to social service work. Her approach was committed and businesslike. She came to regard her work for a wide variety of causes and organizations as full-time employment, with a salary that had been "paid in advance" through her family's business successes.

Drawn to ventures that allowed for close personal association, Dodge often acted as a facilitator, but not a leader of informal clubs. In 1881 she formed a club with factory girls around her own age. Their weekly meetings for "fellowship and discussion" gradually came to include a headquarters, library, recreation rooms, and classes. Within a decade, the concept grew into a national Association of Working Girls' Societies. Her mantra was always to work with, rather than for, working women. Some of the friendships formed in this first club lasted throughout Dodge's life.

Dodge also worked to promote vocational education and practical training as a means of combating poverty. She founded the Kitchen Garden Association in 1880 which was reorganized into the Industrial Education Association in 1884. These groups offered classes in "household arts," manual training, and later, teacher training. The Industrial Education Association was eventually reorganized into Teachers College in 1889 with Dodge as its first Treasurer.

Dodge developed somewhat of a specialty of encouraging organizations with similar missions to join forces in order to increase their effectiveness. In 1906 she brought together two warring national associations of YWCAs to form a single national association. Grace Dodge served as the new Association's first president until her death.

Other organizations benefiting from these talents included the New York Travelers Aid Society, formed in 1907, and the American Social Hygiene Association in 1912.

Grace Dodge died suddenly in her home on December 27, 1914.