Though this definition is coming from Italy, be not fooled, there are now Gran Fondos being ridden and sponsored in many states around the USA, it's a bit of a new fad.
" Gran fondo means long distance or great endurance. Some cyclists ride for the satisfaction and pride of just making it to the finish line. Others want to improve upon their previous times, and to challenge themselves, their friends, their teammates. And some ride to win! The phenomenon has grown so huge that there are now specialized gran fondo teams with sponsored, salaried riders, some of them ex-pros. As a result, the average amateur racer can forget about ever winning a gran fondo (Eugeny Berzin got dropped on the first climb of the 2001 GF Campagnolo!). But if you'd like to know what it's like to race a stage of the Giro and feel like a pro, here's your chance, for this is as close as it gets!"
In other words, as other rides for the benefit of say Muscular Dystrophy is a long ride where one racks up kilometers or miles for a charity or other rides are just for "fun", in a Gran Fondo, you might choose to ride a certain distance, for example, 68 or 100 miles and you try to see at how well you can ride it, 3 hours?? You might set a personal record and think to yourself, "I'm a bloody good rider." But in most of these cases, it really is not a race except that you are racing yourself to see how well you can do. Is that clear??
Here is another good article written by an American on Gran Fondos, apparently American Cyclist Lepheimer I believe has been instrumental in getting a Gran Fondo run in San Diego but they are starting to be ridden all around the world. In England, I wonder if they call them Sportives or Audaxes.
"Gran Fondo is an Italian term that more or less translates to “Big Ride”; in practice they are hybrids between long distance recreational cycling events (such as centuries) and competitive events (such as road races). The equivalent word in French is Cyclosportif; the Brits, Flemish, and Dutch call them Cyclosportives."