From The Heroes of Might and Magic III wiki

Grail building for the Dungeon.

To build this structure, find and bring the Grail artifact to a Dungeon town, and click on the Village/Town/City Hall or Capitol, and you will be asked if this is where you want the permanent home of the Grail to be.

The Grail grants the following to all town types:

• 5000 extra gold per day
• 50% additional creature growth

The Guardian of Earth in particular also:

• Increases Spell Power of the defending hero by 12 during a siege.