Let me give a scenario in which it would be proper. I would be skeptical of other scenarios that aren't essentially similar.
Suppose that I'm an experienced grant writer but am now retired. Suppose also that I'm not an active reviewer for funding agencies, though have done so in the past. I have a lot of knowledge that it would be good to pass on.
Suppose a university, either the one I've retired from or any other, approaches me with a proposal to train their young researchers and to help them actively by reviewing a current proposal and giving feedback and advice on it. Suppose they also offer to pay me a non-token amount for my efforts.
I would think that, then, it would be fine to agree. This is really no different from a commercial company asking me to train their employees in some state of the art technology for which they need advice. As with the company you have to remove the possibility of a conflict of interest.
If I were not yet retired, then it gets a bit sticky. If it were my own university and I was "paid" by having other duties reduced for a while, then fine.
If it is another university and I'm not retired then it is even stickier. To do a decent job of it takes time and effort, which should be compensated. But it is also very difficult to avoid conflict of interest scenarios.
And, for an active faculty member, especially one who is still developing grant proposals or who is reviewing for agencies it becomes ethically "interesting", to say the least.
Among other issues, the requesting university would probably want a "non disclosure agreement" for the work. What effect might that have on your own research program?
If I review a grant informally and offer improvements and then am asked to review it formally on behalf of an agency, I have a conflict. I would ethically have to decline the formal review. The worst case is one in which the one asking for this service initially is actually trying to create such a conflict, guaranteeing that I could not be a formal reviewer - an attempt to take me out of the picture. I don't suggest that this is what is going on in this specific case, but it would put a cloud over the whole practice.
So, I think that most scenarios are problematic. It is very different from the normal practice of reviewing papers, because reviewing is done on behalf of a third party: the journal or conference.
And it is also different from informal cross-reviewing of papers within a circle of collaborators as it becomes a cooperative venture in that case.